Lloyd’s of London announced an annually accounted profit of $2,605 million in 2004. Although below profits of 2003, this result was achieved despite net claims of $2.3 billion from the U.S. hurricanes, in the worst-ever year for industry losses from natural catastrophes.
The latest projection, at 24 months, for the 2003 year is a profit of $3,972 million.
A.M. Best Co. commented that all ratings of Lloyd’s of London and the Society of Lloyd’s remain unchanged following the announcement of 2004 results. The rating organization said the profit falls at the upper end of the range anticipated, taking into account net catastrophe losses and the impact of the recent settlement with Central Fund insurers.
A.M. Best rates Lloyd’s as A (Excellent) with a stable outlook.
Lloyd’s also reported a combined ratio of 96.9% (2003: 90.7%), which it said compares favorably with an estimated average of 98.7% for U.S. property and casualty insurers, 106.1% for U.S. reinsurers and 98.2% for European insurers and reinsurers.
Resources of the Society and Members were up 20% to $23,364 million in 2004.
“These results, achieved despite significant losses from natural catastrophes, are testimony to the continually improving quality and strength of the Lloyd’s market,” stated Lord Levene, chairman of the insurer. “A few years ago, such a performance would have been unthinkable.”
“Lloyd’s performance compared well with our global competitors,” said Lloyd’s chief executive, Nick Prettejohn, said. “However, we must remain vigilant if we are to continue to deliver a strong underwriting performance. Market conditions remain profitable but increasingly competitive in a number of lines. “There will be no let up in our determination to improve the efficiency of doing business at Lloyd’s and in our focus on the quality of that business rather than volume.”
Lloyd’s is the world’s leading specialist insurance market with a capacity to accept insurance premiums of more than $26.3 billion in 2005. It occupies sixth place in terms of global reinsurance premium income, and is the second largest surplus lines insurer in the U.S. In 2005, 62 syndicates are underwriting insurance at Lloyd’s, covering all classes of business from more than 200 countries and territories worldwide.
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