Lloyd’s of London’s profits halve amid lower investment returns
The insurance market said pre-tax profits came in at just £600 million.
Lloyd’s of London has cheered first half results despite seeing profits halve, saying it was starting to emerge from “one of the costliest years for natural catastrophes in the past decade”.
Its latest earnings report showed pre-tax profits came in at just £600 million, down from £1.2 billion during the same period last year.
Lloyd’s said that figure was affected by lower returns on investment, totalling just £200 million compared to £1 billion a year earlier, “which is consistent with the low returns seen across most asset classes over the period”.
But executives cheered Lloyd’s performance, given the market suffered its first annual loss in six years in 2017 on the back of a raft of natural disasters.
Lloyd’s tumbled £2 billion into the red last year when insurers were hit by mammoth bills following hurricanes in the Caribbean and Florida, earthquakes in Mexico and wildfires in California.
Chief executive Inga Beale said: “These results and return to profit demonstrate the strength of the Lloyd’s market following one of the costliest years for natural catastrophes in the past decade.
“Whilst these results are welcome, Lloyd’s continues to concentrate on improving the Lloyd’s market’s long-term performance by taking action to address under-performing areas of the market.
“The corporation also remains focused on making the Lloyd’s platform more competitive.”
The Lloyd’s earnings report showed a “modest increase” in gross written premiums to £19.3 billion, up from £18.9 billion, thanks in part to improvements in pricing and “growth in some profitable lines”.
Ms Beale added: “The corporation also remains focused on making the Lloyd’s platform more competitive.
“Alongside the success of the mandate for the placement of electronic risks, we have recently launched the Lloyd’s Lab, our new innovation accelerator, which will help Lloyd’s use technology to better serve our customers around the world.
“We have also worked tirelessly to secure the Lloyd’s market’s access to the EU27 and our Lloyd’s Brussels subsidiary will start writing business in the European Economic Area from January 1 2019.”
Lloyd’s first announced plans for Brussels as the location of its post-Brexit EU subsidiary last year, and had its licence approved this past May.
It is the last set of earnings results to be overseen by boss Inga Beale, whose departure was announced in June.
Her replacement John Neal will take up the position on October 15.
Mr Neal, the head of Australian insurer QBE, was confirmed as Ms Beale’s replacement earlier this month.
Prior to heading up QBE he was associated with the Lloyd’s market as underwriter and later as chief executive of the Ensign Managing Agency.