Thursday, 22 September 2011
Lloyd's suffers £697m loss after battering from nat cats
Lloyd's has announced losses of £697m (€774m) and a combined ratio of 113.3% for the first six months of 2011 on the back of what it described as unprecedented levels of natural catastrophe losses this year.
Lloyd’s chief executive, Richard Ward
The loss compares with a profit of £628m (€696) for the same period last year, a swing of £1.33bn (€1.47bn), and a combined ratio figure of 98.7%.
“The result follows the costliest first six months on record for major catastrophes for the insurance industry, with 2011 already likely to be the second most expensive year ever for insurers,” said Lloyd’s.
Both figures seem high. But Lloyd’s was keen to point to figures that suggest its combined ratio figure compares favourably with its peers in the Bermudian and US risk transfer industries.
Please sign up here to our full-time mailing list to ensure that you receive our weekly newsletter.
According to Lloyd’s figures the Bermudian (re)insurance market as a whole posted a combined ration for H1 of 117% and the US reinsurance industries 116%.
But European insurers and reinsurers reported a combined ratio of 106%.
Lloyd’s chairman, Lord Levene, said: “2011 has already been one of the most challenging years on record for the insurance industry with major natural catastrophes devastating communities in Australia, New Zealand, Japan and the US. Lloyd’s ability to pay billions in claims to help these communities rebuild is unquestioned and the fact that we have managed to do so without any call on our central capital reserves is testament to the market’s exposure management.”
Lloyd’s investment return stayed solid at £548m (€608m). In the first half of 2010 they reported a £597m (€661m) return.
Its central assets of £2.47bn (€2.74bn) are at a record high, up from £2.23bn (€2.47bn) in June of last year.
“These are tough times for the insurance industry, but we are well positioned to handle them. Despite incurring €7.4bn in claims from the costliest first half year on record, Lloyd’s entered the second half of the year with €63bn in net assets to support our business and pay claims. However, while interest rates are low and equity markets are volatile, we can’t rely on investment income to subsidise our underwriting, we must decline under-priced risks,” said Lloyd’s chief executive, Richard Ward.
Please sign up here to our full-time mailing list to ensure that you receive our weekly newsletter.
New Risk Framework proves every cloud has a risky lining
UK business expects cyber attacks to increase despite government plans
Canopius to acquire Omega and form partnership with Tower Group
Heavy UK flooding must prompt mitigation rethink—FM Global
No evidence for deregulation of UK health and safety law as second review announced
Lords risk select committee needed to drive agenda says academic
UK market stable as rate increases offset by sluggish economy—Moody’s
Countdown to the Olympics-comment
London firms need to wake up to Olympics’ travel and IT threats
Asbestos point of exposure ruling provides welcomed clarity say observers
Airmic report suggests buyers confused over environmental risk warns expert
UK business could face flood cover problems and price hikes by summer
ABI calls for government reform of ‘overzealous' health and safety rules
UK business more pessimistic about economic recovery finds QBE survey
Airmic focus back on Reservation of Rights as concerns increase
Airmic steps in as contingent commissions raise their ugly head
FSA says Solvency II transposition date may slip
S&P raises its long-term ratings on RSA
Guidance on ECJ gender discrimination ruling confusing markets-Clyde & Co
Further sharp increase in UK product recalls in 2011
Aon Corp relocates headquarters to London
