Lloyd’s of London announced an overall profit of £2.195 billion ($3.522 billion) for 2010, a significant decrease from the record £3.868 billion (more than $6.2 billion) it recorded in 2009.
The earnings report also noted that Lloyd’s combined ratio for 2010 was of 93.3 percent, an increase from the 2009 figure of 86.1 percent. However Lloyd’s noted that it “compares favourably with an estimated average of: 101.5 percent for US property and casualty insurers; 95.4 percent for US reinsurers; 90.8 percent for Bermudian insurers and reinsurers, and 101.0 percent for European insurers and reinsurers.”
Lloyd’s central assets reached a record level of £2.377 billion [$3.8143 billion], an increase of nearly 12 percent from £2.084 billion [$3.344 billion] at the end of 2009.
Investment returns were £1.258 billion [$2.02 billion], a decrease of nearly 30 percent from £1.769 billion [$2.838 billion] returned in 2009. Lloyd’s also released £1.016 billion [$1.63 billion] of prior year reserve surpluses, slightly more than the £934 million [$1.498 billion] released in 2009.
Chairman Lord Levene commented: “”In 2010, Lloyd’s made a profit of £2.2 billion despite facing significant claims from the tragic earthquakes in Chile and New Zealand, the floods in Australia and the loss of the Deepwater Horizon oil rig in the Gulf of Mexico. The catastrophes of 2010 and 2011 have shown the crucial role insurance plays in helping communities rebuild after a crisis.
“We must also keep in mind that insurance is part of a wider financial services industry that is essential to Britain’s economic recovery. We look to the government to protect the competitiveness of our industry and its contribution to both society and the economy.”
CEO Richard Ward added: “This is a solid result in a year with a slightly higher than average number of natural catastrophes. And 2011 has already been an extraordinary year of tragic natural disasters. We extend our deepest sympathies to those affected and we are working hard to make sure claims are dealt with swiftly so communities in Japan, New Zealand and Australia can rebuild and recover.”
He added that “these are challenging times for insurers. Rates have been softening, there is excess capital across the industry and investment returns are down. In 2011, we must help the market steer through the cycle, ensuring they underwrite for profit and not growth. At the same time we are positioning the market to take advantage of future opportunities by expanding in new economies and making it even easier to do business with Lloyd’s.
“Another challenge in 2011 is Solvency II and I am confident we are making good progress. However, I am increasingly concerned by the cost and complexity of this exercise. We must make sure this one piece of regulation doesn’t do lasting damage to our international competitiveness – either for Lloyd’s or the industry more widely.”
Source: Lloyd’s of London
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