Lloyd's of London swings back to profit in 2012 first half: Interim report
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Lloyd’s of London registered a $2.4 billion profit for the first half of the year, according to an interim results report issued Wednesday, compared with a $1.12 billion loss for the same period last year.
Much of the reason for the improvement stems from lower catastrophe losses, said Luke Savage, Lloyd’s chief financial officer. “If you’re contrasting with last year, it’s the relatively benign first half we’ve had,” he said. “In contrast with last year, there has been a big reduction in those major claims.”
“We continue to generate modest investment returns, up slightly from last year,” Mr. Savage continued. He said investment income — up 1.1% from the first half of last year to $978 million — was “a little better than we would have forecast.” He added that interest yields “cannot get very lower.”
“It’s a good solid set of figures against a tough background,” said Mr. Savage. “There continues to be far too much capital in the market as a whole. The rate environment is not great, investment returns in the foreseeable future are not going to be great, and it means we have to stay focused on underwriting profit.”
Other financial highlights for Lloyd’s first half include:
• A 32% drop in net incurred claims from the same period last year to $7.24 billion.
• An improvement in the combined ratio to 88.7% from 113.3% at half-year 2011.
• A 3% decline in central assets to $3.86 billion.
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