Lloyd’s pre-tax profit rose 10% last year to £10.6 billion ($20 billion) as gross written premium increased despite a more competitive pricing environment.

The results come as the market releases a five-year strategy to sharpen its financial edge.

CEO Patrick Tiernan says strong underwriting, disciplined growth and resilient investment returns underpinned the financial performance.

“Supported by a very strong balance sheet, these results provide a firm foundation for the challenges and risks ahead, enabling the market to support communities, businesses and economies through periods of uncertainty,” he said.

Gross written premium was up 4.2% to £57.9 billion ($109.5 billion), with 10.3% volume growth reflecting new participation in the market and expansion by existing syndicates.

The volume gain was offset by foreign exchange impacts, as sterling strengthened against the US dollar, and a 3.7% pricing reduction.

The underwriting result eased to £5.2 billion ($9.8 billion) from £5.3 billion ($10 billion), with the combined operating ratio deteriorating to 87.6% from 86.9%.

The market benefited from comparatively benign catastrophe losses in the latter part of the year, while the expense ratio rose due to profit-driven commissions, mix-driven acquisition costs and foreign exchange impacts.

The investment return improved 5.6% to £6 billion ($11.3 billion).

The five-year strategy focuses on underwriting performance, improving marketplace efficiency, maximising capital advantage, and fostering a culture of innovation and talent.

Mr Tiernan says the plan is a “return to first principles”.

“This marketplace can shoulder more insurance risk for every unit of capital than any other financial organisation in the world,” he said in a LinkedIn post.

“Many organisations claim a unique advantage, but few can back it up. The Lloyd’s market can. Fewer still have the opportunity to capitalise on such an advantage from a position of financial strength. The Lloyd’s market does.”