Lloyd’s first-half profit before tax has jumped to £2.3 billion ($4.2 billion) on higher investment returns, as the market moves ahead with a project to improve its long-term profitability.

Last year Lloyd’s reported a first-half profit of £600 million ($1.1 billion) before the annual result fell into the red for a second straight year.

“We are pleased to report a profit during the first six months,” CEO John Neal said last week. “However, we recognise the importance of a continued focus on performance management to maintain this momentum throughout the rest of 2019 and beyond.”

Latent claims from 2017 and 2018, including from Japan’s Typhoon Jebi, contributed to the combined operating ratio deteriorating to 98.8% from 95.5%, but the market says its loss ratio for active syndicates showed clear signs of improvement.

Gross written premium increased 1.8% to £19.7 billion ($35.8 billion), while the elimination of exchange rate movements and growth from new syndicates pointed to a “like-for-like” reduction of 2.6% as the market took a tougher approach on underperforming areas.

Net investment income was £2.3 billion ($4.2 billion), up from £200 million ($363 million) a year earlier, on benefits from unrealised gains due to reducing US and UK bond yields as well as robust equity returns.

The market has been holding consultations this year on plans to drive innovation, cut costs and improve services and will publish a first blueprint on September 30.

“Looking ahead, our strategy for the Lloyd’s market includes specific initiatives to attract new funds to the marketplace,” Mr Neal said.