View this article online: https://www.insurancejournal.com/news/international/2020/03/26/562423.htm
While announcing a return to profit of £2.5 billion (US$3 billion) for 2019, Lloyd’s also affirmed that the market is in a strong position to respond to the impacts of COVID-19.
Lloyd’s return to profit was the first since 2016 and was a £3.5 billion (US$4.1 billion) improvement over its 2018 loss of £1.0 billion (US$1.2 billion). Lloyd’s said its 2019 results were driven by the repair in investment markets in the first half of 2019, alongside sustained rate increases and improving underwriting discipline.
Nevertheless, the market still reported underwriting losses in 2019 indicated by its combined ratio of 102.1%, an improvement of 2.4 percentage points from the 104.5% reported in 2018. (Combined ratios above 100% indicate an underwriting loss).
Lloyd’s said the market has made “encouraging” progress, given the fact that the underlying 2019 accident year ratio improved to 96.0%, (2018: 96.8%), exclusive of major claims, which show its “performance agenda is beginning to drive better underwriting discipline in the Lloyd’s market.”
Demonstrating that the market has the resilience to withstand the financial impact of the COVID-19 pandemic, Lloyd’s said, in 2019, Lloyd’s net resources increased by 8.6% to £30.6 billion (US$36.2 billion), “reflecting an exceptionally strong balance sheet and a central solvency ratio of 238%.” (The statutory supervisory standard for solvency ratios under Solvency II is 100%).
Although there has been a high degree of turbulence in the financial markets over recent weeks, Lloyd’s said, its solvency ratio stood at 205% on March 19.
“Whilst we are pleased to be announcing Lloyd’s return to profitability in 2019 and continued progress across our priorities, our primary focus right now is on supporting our customers and business partners in their time of need,” said John Neal, Lloyd’s CEO, in a statement.
Neal said it has never been more important “to accelerate progress on our ambition to create the most advanced insurance marketplace through the Future at Lloyd’s.”
“We have sharpened our focus for 2020, prioritizing initiatives that will ensure around 80% of Lloyd’s business is digitally supported, together with fast-tracking claims processing improvements and building the foundational data and technology infrastructure to support Lloyd’s future ecosystem,” he continued.
“The beginning of 2020 has proved exceptionally difficult as COVID-19 spreads rapidly around the world with devastating consequences for families, communities and the global economy. Now more than ever, our customers need us to be ready to support them through these challenging times,” said Bruce Carnegie-Brown, Lloyd’s chairman.
“At Lloyd’s, we are laying the foundations to do this more effectively. By focusing on performance management, modernizing the market and creating a market culture that will attract the best and brightest talent, we are making the market more resilient, more successful and better placed to meet our customers’ needs,” Carnegie-Brown added.
The key figures reported in Lloyd’s 2019 Annual Report are:
Source: Lloyd’s
Related:
Lloyd’s Faces COVID-19 Claims from 12 Insurance Lines, Says CEO Neal