BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
LONDONThe calm after the storm helped Lloyd's of London post a marketwide pretax profit of £3.66 billion ($7.16 billion) for 2006, the year after Lloyd's went into the red as a result of a string of hurricanes in the United States.
In 2005, the Lloyd's market reported a pretax loss of £103 million ($176.8 million), attributing the result to an active hurricane season in which it saw record claims totaling £3.31 billion ($5.68 billion).
But a year later, Lloyd's "benefited from strong underlying conditions and an exceptionally low level of catastrophes," said Lloyd's chairman, Lord Peter Levene, in a statement.
The Lloyd's market reported a 12.1% increase in net written premiums to £13.20 billion ($25.83 billion). Gross premiums written rose 9.6% to £16.41 billion ($32.11 billion).
In 2006, Lloyd's had a combined ratio of 83.1%, an improvement over the 111.8% reported in 2005.
Net assets for the Central Fund, which acts as a claims backstop for syndicates operating in the market, had net assets of £843.0 million ($1.65 billion) at year-end 2006, up 25.8% over the end of 2005.
Lord Levene warned that the favorable results may not continue throughout 2007.
"It would be unrealistic to expect such a favorable claims experience this year. With a trend for more frequent and severe natural catastrophes, we must continue to underwrite for profit," he said in the statement.
Meanwhile, Equitas Ltd.--the runoff reinsurer for Lloyd's syndicates' pre-1993 long-tail liabilities--has completed the first phase of a deal with Berkshire Hathaway Inc. that could provide it with $7 billion in reinsurance cover and ultimately end the liabilities of Lloyd's names reinsured into the vehicle.
Under the deal, which was announced last October, Berkshire unit National Indemnity Co. has reinsured Equitas' liabilities and has provided an additional $5.7 billion in cover to Equitas. In return, National Indemnity will receive Equitas' assets--totaling £4.90 billion ($8.49 billion) as of March 31, 2006--as well as a premium from Equitas and a contribution from Lloyd's.
National Indemnity also has acquired Equitas Management Services Ltd., which will continue to manage the runoff of Lloyd's pre-1993 business.
In a statement, Equitas said that the deal had received all necessary approvals. The transaction had been approved by the U.K. Financial Services Authority, and the New York Insurance Department had approved amendments to the Equitas American Trust Fund that were required.
Equitas will continue to exist and now will work toward a transfer of all liabilities of names into Equitas or a special-purpose vehicle, the company said in a statement.
Subject to High Court approval, once the transfer of liability from Lloyd's names to a limited liability company is complete, Equitas has the option to purchase a further $1.3 billion of reinsurance cover from National Indemnity.
Under the terms of the deal, the Berkshire Hathaway subsidiary has the option to acquire the company once the transfer of liabilities is completed.
Following the Equitas announcement, Fitch Ratings upgraded its financial strength rating on the Lloyd's market by one notch, to A+.
Stuart Collins contributed to this report.