Lloyd’s rebounds to profit after underwriting ‘turnaround’
Lloyd’s of London reported a profit of £1.4 billion ($1.93 billion) for the first half of this year, compared with a loss of £400 million in the year-earlier period, after underwriting returned to a profit, helped by average premium rate increases of 9.9%.
Lloyd’s said the results mark a “turnaround” for the market, having shed about 6% of underperforming business to improve profitability.
The market’s combined ratio closed the half-year at 92.2%, from 110.4% in the first half of 2020.
Lloyd’s said growth for the first time in four years of 4%, alongside premium rate increases for the 15th consecutive quarter in the second quarter, helped increase gross written premiums by £500 million, or 2%, to £20.5 billion for the first half. Excluding the impact of foreign exchange and growth from new syndicates, premiums increased 8% during the first half.
CEO John Neal said Lloyd’s settled £9.4 billion in claims during the first half and paid 80% of COVID-19 claims notified.
“Market performance has improved as a result of our ongoing remediation efforts. This … brings Lloyd’s performance in line with our global peer group,” Mr. Neal said.
He added that Lloyd’s’ performance management focus will “heighten” on cyber and financial lines classes next year.
Casualty was the only class of business to remain in the red for this year’s first half, reporting underwriting losses of £44 million. But that was down from a loss of £386 million in the first half of last year.
Property accounted for the bulk of last year’s first-half underwriting loss of £1 billion, but led other classes with a profit of £281 million for the first six months of 2021.
Reinsurance turned around an underwriting loss of £256 million for the first half of 2020 to add £199 million to Lloyd’s’ profit in this year’s first half.
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