Lloyd’s announced overall pretax profits of £3.868 billion [$5.796 billion] for 2009, doubling the £1.899 billion [$2.84 billion] it reported for 2008. The record results were achieved despite ongoing economic problems in the UK and the decline in the value of the pound, which was exchanged at nearly $2.00 a year ago, and now trades at around $1.50.
Lloyd’s announcement also listed the following “financial highlights:”
— combined ratio of 86.1 percent (2008: 91.3 percent) compares favorably with an estimated average of 100 percent for US property and casualty insurers (i) 94 percent for US reinsurers (ii) 99 percent for European insurers and reinsurers and, 84 percent for Bermuda’s insurers and reinsurers (iii);
— central assets increased to £2.084 billion [$3.12 billion] (2008: £2.072 billion) [$3.1 billion];
— investment return of £1.769 billion [$2.65 billion]m (2008: £957 million) [$1.433 billion];
— profit before tax excluding currency movements on non-monetary items of £4.247 billion [$6.36 billion] (2008: £1.529 billion) [$2.29 billion]; and
— surplus on prior years’ reserves of £934 million [$1.398 billion] (2008: £1.265 billion [$1.895 billion]).
Lloyd’s Chairman Lord Levene commented: “the hard work and very careful attention to risk in the Lloyd’s market have resulted in a pre-tax profit of £3.9 billion, the highest that we have ever recorded.
“The result has been achieved despite the economic turbulence that characterized most of 2009, although we were certainly helped by a low level of catastrophe related losses – helped by a benign Atlantic hurricane season. The market can be proud of what it has achieved in 2009.
“These results show that not all parts of the financial services sector are the same and, at Lloyd’s, our strength and resilience means that we can face the future with confidence.”
Lloyd’s Chief Executive, Richard Ward added: “Our 2009 results are built on a resolute focus on underwriting discipline coupled with a strong balance sheet and a conservative investment strategy. This has meant that, during testing times for the financial services industry, we continued to be a stable partner for businesses seeking to manage their risks.
“While the results are a testament to our strength, we cannot afford to be complacent and in 2010 we must work to continue to develop the attractiveness of the market, whilst focusing on profitable underwriting and sound risk management.”
The full report, as well as an interview with Richard Ward, are available on the Lloyd’s web site at: www.lloyds.com .
Notes on sources of information: i) Insurance Information Institute estimate, ii) Reinsurance Association of America, iii) Company data (8 European companies; 17 Bermuda companies).
Source: Lloyd’s of London
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