Natural catastrophes send Lloyd's to $1.1 billion first-half loss

LONDON—Record natural catastrophe losses during the first half of the year pushed the Lloyd's of London market to a £697 million ($1.1 billion) loss for the period, Lloyd's officials said Wednesday.

The first-half loss compares with a profit of £628 million ($991.5 million) for the same last year.

Lloyd's said its first-half combined ratio was 113.3% compared with 98.7% for the first half of last year.

Investment income fell 8.2% to £548 million ($865.2 million).

Mr. Ward said the loss was "not surprising" given the high level of catastrophe losses in the first half of the year, and he said he was pleased that the losses were "manageable."

Lloyd's said its gross written premiums for the first half of 2011 were £13.53 billion ($21.36 billion) compared with £13.50 billion ($21.31 billion) for the first six months of 2010.

The record first-half catastrophe losses already have made this year the third most costly for Lloyd's after 2001 and 2005.

Natural catastrophes cost Lloyd's about £2.8 billion ($4.42 billion) in the first half of 2011, said Richard Ward, the market's CEO. Total claims in the first half were £6.7 billion ($10.58 billion), he said.

Losses from flooding in Australia, and the earthquakes in New Zealand and Japan cost the market about $3.8 billion ($6 billion), Mr. Ward said.

http://www.businessinsurance.com/article/20110606/NEWS/110609944 Tornadoes in the United States resulted in about $600 million in claims, he said.

Other large losses include about $250 million from the February loss of Maersk Oil's Gryphon North Sea oil and gas installation, which is estimated to have caused industrywide losses of about $1 billion ($1.58 billion), said Luke Savage, director of finance, risk management and operations at Lloyd's.

Mr. Ward said that while property insurance rates were increasing for catastrophe-exposed business, other lines of business, particularly casualty lines, still were softening in some cases.