(Bloomberg) -- Lloyd’s of London dropped to a loss last year and said it made “significant” valuation losses across its portfolio in the wake of rising interest rates.

The world’s largest insurance exchange reported a pre-tax loss of £769 million ($948 million) in 2022, down from a profit of £2.3 billion the previous year, according to a statement Thursday. Valuation losses on its investments dampened a positive underwriting result, leading to the loss. 

Lloyd’s said it reported a net investment loss of £3.1 billion after market turbulence eroded values across its portfolio. The exchange said losses engulfed assets from investment grade fixed income bonds to equity markets, with long duration assets the most affected.

“2022 was an exceptionally turbulent year for risk assets, driven by rising interest rates, as central banks have taken action to contain the increasing levels of inflation caused by supply chain disruption, the war in Ukraine and political uncertainty,” Lloyd’s said in the statement. 

Mark-to-market writedowns on its bond holdings are expected to reverse over the next two to three years as they mature, the exchange added. 

In 2022, major claims included natural catastrophe losses such as Hurricane Ian, Hurricane Fiona and Australian floods, as well as losses arising from the conflict in Ukraine.

--With assistance from Tom Metcalf.

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