Lloyd’s half-year gross profit falls 47%
Lloyd’s has reported a 47% drop in half-year gross profit as rising claims drained profitability from the world’s largest insurance market.
It reported profit before tax of £949 million ($2.1 billion) to June 30, well down on the £1.8 billion ($4 billion) it recorded during the same period last year.
Gross written premium increased 1% to £9.98 billion ($22.2 billion) while the combined ratio deteriorated from 82.9% to 89%.
Return on capital was grim at 7.4% against 14.3% a year prior.
Lloyd’s CEO Richard Ward says the weaker result was “no surprise”.
“A softening in rates from their peak was inevitable and the very low levels of claims could not continue.”
Claims incurred increased from £3.2 billion ($7.1 billion) to £3.4 billion ($7.6 billion), contributing to a 36% drop in underwriting profit of £699 million ($1.55 billion).
Mr Ward says a number of established syndicates have reduced business volume – “a welcome sign of underwriting discipline”.
“The market remains in a good position to face the challenges ahead but we are all acutely aware that the external conditions in which we operate are about to test our operating structure and our resolve,” he said.
It reported profit before tax of £949 million ($2.1 billion) to June 30, well down on the £1.8 billion ($4 billion) it recorded during the same period last year.
Gross written premium increased 1% to £9.98 billion ($22.2 billion) while the combined ratio deteriorated from 82.9% to 89%.
Return on capital was grim at 7.4% against 14.3% a year prior.
Lloyd’s CEO Richard Ward says the weaker result was “no surprise”.
“A softening in rates from their peak was inevitable and the very low levels of claims could not continue.”
Claims incurred increased from £3.2 billion ($7.1 billion) to £3.4 billion ($7.6 billion), contributing to a 36% drop in underwriting profit of £699 million ($1.55 billion).
Mr Ward says a number of established syndicates have reduced business volume – “a welcome sign of underwriting discipline”.
“The market remains in a good position to face the challenges ahead but we are all acutely aware that the external conditions in which we operate are about to test our operating structure and our resolve,” he said.