Lloyd's sees decline in first-half profits as investments fall
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LONDON--Lloyd's of London posted a profit of £1.35 billion ($2.49 billion) in the first half of 2006, down slightly from the £1.38 billion ($2.47 billion) recorded in the first six months of 2005, due in part to lower investment income.
The market's combined ratio for the first half of 2006 was 86.0%, compared with 87.3% for the same period last year.
Lloyd's said that while underwriting profit increased by 20% during the first half of 2005 to £852 million ($1.57 billion), the market's investment income fell by 13.1% to £571 million ($1.05 billion) for the first six months of 2006.
Gross written premiums were £9.97 billion ($18.35 billion) for the first half of 2006, up 18.7% compared with the prior-year period.
Lloyd's said that during the first half of 2006, about £2 billion ($3.68 billion) of new capital entered the market and that five new syndicates have joined Lloyd's so far this year.
In addition, Lloyd's has set up a Cayman Islands-based special purpose vehicle, Thunderbird Re, to enable members of the market to issue catastrophe bonds.
A spokesman for Lloyd's said that the framework was now in place and that the market had set up a working group to discuss members' catastrophe bond requirements.
He noted that should any market participants wish to issue a bond, it is likely it would take between six to eight weeks.
