Lloyd’s has shaken off its 2011 performance to bounce back strongly with a pre-tax profit of £2.77 billion ($4.04 billion) for the year to December 31, 2012.

For 2011 – which came in as the costliest year on record for natural catastrophes – the market posted a pre-tax loss of £516 million ($753 million).

Lloyd’s CEO Richard Ward described the result as “strong”, especially as the market incurred net claims costs of £10.1 billion ($14.74 billion) for the year, only slightly down on the £12.9 billion ($18.83 billion) in claims it faced in 2011.

US Superstorm Sandy resulted in £1.35 billion ($1.97 billion) in claims in 2012, making it one of the largest claims events in Lloyd’s history.

The market posted a combined operating ratio of 91.1% for the year, compared to 106.8% in 2011.

Gross written premium reached a record high of £25.5 billion ($37.23 billion), partly as a result of average rate rises of 3%, Lloyd’s said.

Ratings agencies affirmed Lloyd’s ratings, while Standard & Poor’s put the market on positive outlook.