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Member, Beacon International Group, Ltd.
LONDON--Lloyd's of London reported a marketwide profit of £1.89 billion ($3.38 billion) for 2003, as insurers in the market continued to benefit from higher rates.
The 2003 profit was more than double the £834 million ($1.33 billion) profit that Lloyd's reported in 2002. Included in the 2003 results was a £545 million ($975.6 million) increase in reserves made by Lloyd's entities, which was primarily related to U.S. casualty business written between 1997 and 2001.
The 2003 results were "very strong," but there is "no room for complacency," said Nick Prettejohn, chief executive officer of Lloyd's.Rates for property, reinsurance, energy and aviation risks fell slightly during the Jan. 1, 2004 renewals, though casualty and marine rates remained stable, he said.
Lloyd's continues to publish its accounts on both a one-year and three-year basis as it phases out its traditional three-year accounting system.
Under the three-year system, all premiums, claims and associated expenses are recorded in the year in which a policy incepts, and the underwriting result is reported when the so-called year of account closes at the end of three years. 2004 will be the last year for which Lloyd's also will publish three-year figures.
The latest year to close under the three-year system is 2001, and for that year Lloyd's reported a loss of £2.34 billion ($4.19 billion). That year of account included massive losses from the Sept. 11, 2001, terrorist attacks.
Lloyd's also published its projections for 2002 and 2003 under the three-year system, which, due to the different accounting methods, differ from the one-year accounting results.
On that three-year basis, the 2002 year is projected to produce a £1.67 billion profit ($2.99 billion), Mr. Prettejohn said, while 2003 is projected to produce a £1.78 billion profit ($3.18 billion).