He added: "Insurance for the last 40 years has grown at the rate of GDP - it's set to double, both life and non-life premiums, globally in the next decade. Mr Neal said he was optimistic about further premium growth during 2023. In the case of premiums, they increased on a gross basis by 19% in 2022 to £46.7bn, most of that due to higher pricing. So it is all down to being disciplined with underwriting and making appropriate risk assessments. What makes things tricky is when you do not charge enough for your premiums or when losses come in higher than expected. You take premiums from customers and you pay out when customers claim for a loss.
Insurance can often look daunting from the outside looking in but, boiled down, it is an essentially simple business. "Nobody has sold any assets - so it's purely an accounting measure, non-cash, and of course the benefit unwinds in 2023 and beyond so it makes this year look better."
Mr Neal said: "The reality is that rising interest rates, dare I say it, are good for us as insurers - it creates an opportunity for us to enhance our profitability - but on a mark-to-market basis you crystallise the reduced value of the asset, notwithstanding the reality that it will yield more over time.
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