Chile earthquake, Deepwater Horizon losses hit Lloyd’s, says interim report

Lloyd’s has announced an interim profit before tax of £628 million (USD $942 million) for the six-month period ending June 30, 2010. The result reflects a period of significant claims and extremely challenging investment conditions.

A conservative investment mix has resulted in a positive return of £597 million (USD $896 million) during a period of continuing volatility in financial markets, and central assets are at a record high of £2,232 million.

The insurance market also made a combined ratio (which measures claims as a percentage of premiums) of 98.7% – comparing favourably with Lloyd’s peers.

“The first six months of 2010 were the costliest on record since we began interim reporting, testing not only Lloyd’s but insurers around the globe,” said Lloyd’s Chairman, Lord Levene.

“While events such as the Chilean earthquake and the Deepwater Horizon loss have proved challenging, paying these claims and supporting our policy holders is what we are here to do.”

He added that it was an indication of the strength of the Lloyd’s market that “despite challenging investment conditions, softening rates and exceptional catastrophic events, we have returned a first half profit of £628 million”.

Lloyd’s Chief Executive, Richard Ward, said: “The first half of 2010 demonstrates that we are well placed to deal with challenging market conditions. Our resolute focus on underwriting discipline, close attention to our customers’ needs and a prudent approach to investment stands us in good stead for the second half of the year.”

Lloyd’s said peers recorded an estimated average of 101% for US property & casualty insurers (June 2009 100%) (i); 99% for US reinsurers (June 2009 94%) (ii); 95% for Bermuda (June 2009 84%) (iii); and 101% for European insurers and reinsurers (June 2009 99%).

Print