The new strategic direction for Lloyd’s will see the market build a “United Nations of insurance” off the back of booming developing markets, according to reinsurance broker Guy Carpenter.

It notes in a new report that last year’s record losses driven by unprecedented catastrophes have not fatally wounded the London-based market, and applauds Lloyd’s investment in developing regions as it consolidates traditional markets.

While Lloyd’s faces challenges implementing its “Vision 2025” strategic direction – launched in May by Prime Minister David Cameron and Lloyd’s Chairman John Nelson – Guy Carpenter says the market’s success will “ultimately benefit the global (re)insurance industry and its clients as a whole”.

“Guy Carpenter welcomes the strategic plans outlined by Lloyd’s, which mirror our own values of leveraging global resources to solve clients’ local problems,” the broker says.

The report identifies risks in Lloyd’s pursuit of growth in developing markets and rising competition in the reinsurance market.

“The protracted implementation of Solvency II continues to add uncertainty and may reduce competitiveness and profits in the short to medium-term as insurers adjust their structure to comply with the new capital adequacy levels that are yet to be confirmed.”

While nearly 60% of Lloyd’s current business is sourced from North America and the UK, the market hopes recent forays into Brazil, China and a forthcoming licence in India will bear fruit over the next 40 years.

Modelling by PricewaterhouseCoopers indicates China, India and Brazil will be the world’s first, second and fourth-largest economies in terms of GDP at purchasing power parity (PPP) by 2050.

Standard & Poor’s (S&P) last week upgraded its outlook for Lloyd’s from stable to positive and affirmed the market’s A+ rating.

Last year was the second-worst year for catastrophes, costing the industry around $US105 billion ($102.03 billion). Lloyd’s alone incurred total net claims of £12.9 billion ($19.79 billion) during 2011, including £4.6 billion ($7.05 billion) of catastrophe claims, making it the largest catastrophe claims year on record for the 324-year-old insurance market.

Catastrophe losses contributed to a 2011 loss of £516 million ($791.85 million).

S&P says the market’s competitive position has improved relative to its peers, and while the market suffered large losses in 2011, its operating performance met expected benchmarks.

The ratings agency says Lloyd’s also suffered lower volatility and has continued to attract new entrants and capital providers.

S&P has projected a combined operating ratio for Lloyd’s between 93% and 95% for the full years 2012 and 2013, with pre-tax profits of £1.5 billion ($2.3 billion).