The FINANCIAL -- Lloyd’s, the specialist insurance and reinsurance market, on September 28 announced a profit of £1.22bn for the first half of 2017 with the publication of its interim report.
Lloyd’s also reported a reduction in the combined ratio to 96.9% as well as an increase in gross written premiums to £18.9bn. There was an annualised return on capital of 8.9% for the same period.
The key financial figures are:
Pre-tax profits of £1.22bn (June 2016: £1.46bn)
Return on capital of 8.9% (June 2016: 11.7%)
Combined ratio of 96.9% (June 2016: 98.0%)
Investment return of 1.5% (June 2016: 1.8%)
Net resources of £28.0bn (June 2016: £26.6bn)
These figures do not take into account the recent storms faced by the Caribbean and United States, and instead reflect what had been, until recently, a relatively benign loss period. However, despite continuing pressure on pricing from excess capital and low interest rates, the development of new products has seen an increase in volumes.
The reporting period also features a 78% improvement in the underwriting result up from £0.21bn last year to £0.37bn. This has been shaped by the low incidents of major losses, action taken to address underperforming lines of business along with price and trading competition across other lines of businesses, according to Lloyd’s.
Lloyd’s capital position remains strong and our ratings with the leading ratings agencies were reaffirmed, with Fitch at AA- (very strong), Standard & Poor’s at A+ (strong) and A.M. Best at A (excellent).
Lloyd’s Chief Executive, Inga Beale, said:
“These results highlight the continued strength of the Lloyd’s market, but they do reflect the challenging conditions that have shaped the sector over recent years. Our focus on maintaining a strong underwriting discipline and concentrating on profitable lines of business is showing signs of success, but we cannot allow that focus to waver if we are to continue to ensure the Lloyd’s platform is the most attractive option for customers.
“Whilst these results do not cover the current hurricane season in the Caribbean and United States, the market is assessing claims and starting to make payments that will help local communities and businesses get back on their feet as quickly as possible. It is our ability to respond quickly and effectively in times like these that differentiates the Lloyd’s market and is ultimately what we are here to do.”