Lloyd’s of London profits quadruple on investment gains
Specialist insurer reports first-half pre-tax profit of $2.87 billion
The 330-year old specialist insurance market Lloyd’s of London reported a first-half pre-tax profit of £2.3 billion ($2.87 billion) on Thursday, up nearly fourfold on investment gains and a cutback in underperforming business.
Lloyd’s, which covers commercial risks from oil risks to footballers’ legs, suffered steep losses in 2017 and 2018 due to natural catastrophes such as hurricanes, typhoons and wildfires.
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Lloyd’s last year told its 99 member syndicates to ditch the worst performing 10 percent of their businesses.
“It is encouraging that the Lloyd’s market is showing increased discipline in 2019,” CEO John Neal said in a statement.
“We need to make some brave choices on how to meet the expectations of our customers and all our stakeholders in the future.”
The market has proposed its members move to electronic exchanges next year, as it responds to competition from cheaper rivals. Further details of the strategic changes will be released on Sept 30. Net investment income rose to £2.3 billion from £200 million a year earlier, helped by strong equity returns.
Gross written premiums rose 1.7 percent to £19.7 billion but the company’s combined ratio, a measure of underwriting performance in which a level below 100 percent indicates a profit, weakened to 98.8 percent from 95.5 percent.
The results compare with a profit of £600 million a year ago. Premium rates rose by an average of 3.9 percent, Lloyd’s said. Lloyd’s in May asked the Banking Standards Board to conduct a survey of the insurance market’s 45,000 participants on issues such as honesty and respect to help to improve its working environment, following allegations of sexual harassment at member firms.
The survey will be published on Sept 24, Neal said on Thursday.