Lloyd’s has reported a £1 billion ($1.9 billion) pre-tax loss for last year as another season of costly natural disasters hurt profitability.

Major claims from natural catastrophes including the California wildfires and typhoon Jebi in Japan cost Lloyd’s £2.9 billion ($5.4 billion), down sharply from £4.5 billion ($8.4 billion) in 2017 but the figure is still well above the long-term average of £1.9 billion ($3.5 billion).

Last year ranked as the fourth-highest in terms of major claims cost for Lloyd’s since 2003.

But Lloyd’s says things are looking up, citing the improved pricing environment and also ongoing efforts to improve the bottomline such as pulling the plug on £3 billion ($5.6 billion) of poorly performing business from the market.

Rates for renewal business increased 3.2% and the attritional loss ratio fell 1.3% over 2017.

“On the back of a second higher than average catastrophe claims year, Lloyd’s 2018 aggregated results have shown green shoots of improvement,” CEO John Neal said.

“The 2018 performance review process has now been integrated into the regular planning process, allowing continuous oversight of inadequately performing syndicates and classes of business.

“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 [this year] and in the years to come.”

The financial results released yesterday showed gross written premiums eased to £35.5 billion ($66 billion) from £33.6 billion ($62.4 billion) in 2017, and the combined ratio declined to 104.5% from 114%.

Overall claims for natural catastrophes, gross of reinsurance, reached £19.7 billion ($36.6 billion) compared with £18.3 billion ($34 billion) a year earlier.

Hurricane Michael, which devastated large parts of Florida, was the largest insured natural catastrophe event.

Other major catastrophes that impacted Lloyd’s last year were Hurricane Florence, which brought significant wind and flood damage to North and South Carolina, and typhoons Jebi and Mangkhut, which lashed mainly parts of north Asia.