Lloyd’s of London hit by disaster costs
● Results show that annual losses amounted to £1bn, down on 2017 total
Insurance market Lloyd’s of London yesterday reported its second year in a row of annual losses after claims hit £19.7 billion following a raft of natural disasters, including the devastating Californian wildfires.
The group reported annual losses of £1bn for 2018 after a £2bn deficit the previous year as it bemoaned “another costly year for natural catastrophes”.
Lloyd’s of London said the bill for major claims alone cost the market £2.9bn, including for hurricanes Florence and Michael, Typhoon Jebi in Japan and the US wildfires.
But the group said annual results showed “green shoots of improvement”, with prices strengthening by 3.2 per cent on renewal business.
It reported a combined ratio of 104.5 per cent, compared with 114 per cent a year earlier.
The results came after Lloyds on Tuesday pledged to bring in a raft of new measures in response to reports of a pervasive culture of sexual harassment at the insurance market.
Its plan of action includes an independent route for reporting inappropriate behaviour,
0 Californian wildfires were among the disasters impacting the results
JOHN NEAL, CEO
a market-wide survey on the issue and new training.
On announcing the 2018 losses, Lloyd’s chief executive John Neal said: “The market’s aggregated 2018 results report a combined ratio of 104.5 per cent, and a £1bn loss. This performance is not of the standard that we would expect of a market that has both the heritage and quality of Lloyd’s.
“We have implemented stronger performance management measures which will remain an enduring feature of how we go about our business.
We expect these actions to deliver progressive performance improvement across the market beginning in 2019 and in the years to come.
“Over the last six months we have asked hundreds of stakeholders to tell us how we should evolve Lloyd’s to build a collective vision for the future.
“We have today released a preview of this vision in advance of a full prospectus to be published on 1 May that discusses the future of insurance at Lloyd’s.”
He added: “We are determined to show decisive leadership across three fronts: to address the performance gap; to secure Lloyd’s future success; and, following our announcement yesterday [Tuesday], to tackle all forms of inappropriate behaviour with robust actions to create a more inclusive working environment.”
Founded more than 300 years ago, Lloyd’s is a corporate body governed by the Lloyd’s Act 1871 and subsequent acts of Parliament. It operates as a marketplace within which multiple financial backers, grouped in syndicates, come together to pool and spread risk.
These so-called “members” are a collection of corporations and private individuals, the latter being traditionally known as “Names”.
More than 50 major insurance companies, some 200 registered Lloyd’s brokers and a global network of more than 4,000 local coverholders operate in and bring business to the market, which has its roots in marine insurance and was founded by Edward Lloyd at his London coffee house in 1686.
The business underwritten at Lloyd’s is predominantly general insurance and reinsurance, although a small number of syndicates write term life assurance.
“We have implemented stronger performance management measures which will remain an enduring feature of how we go about our business”