Lloyd's weathers investment storm
Specialist insurance market Lloyd's of London today posted half-year profits of £1.4 billion, despite a sharp drop in investment returns.
The market, which is made up of 89 underwriting syndicates, said it had been a benign first half for natural catastrophes, although net claims still rose 8% on a year earlier to £4.85 billion.
Continued challenging economic conditions significantly impacted investment returns, which fell 60% to £247 million.
Profits were down slightly on the £1.5 billion of a year earlier, although they were much better than the loss of £697 million in 2011 - the second most expensive year on record for the insurance industry.
John Nelson, chairman of Lloyd's, said: "This is a good result for the Lloyd's market, although the volatility of the insurance business means that we must remain cautious about how the full year result will turn out."
Income from written premiums increased by nearly 5% to £15.5 billion in the half year, as the market seized on opportunities presented by faster-growing Asian and Latin American economies.
The Lloyd's market has shown in recent years that it is more than able to cope with major catastrophes and met its own claims in 2011 without any call on its central fund - its fund of last resort.
The most expensive event to rock the insurer was Hurricane Katrina in 2005, which caused claims worth 4.3 billion US dollars (£2.4 billion).
Lloyd's recently unveiled Vision 2025, which sets out plans to grow the business in faster growing markets and to make London the ''global hub'' for specialist insurance and reinsurance by 2025.