Growing fears about the state of the world are pushing more people to take out insurance even as prices rise, Lloyd’s of London Chief Executive Officer John Neal said.
Rising inflation, recession worries, climate threats and geopolitical tensions are making individuals and businesses more wary of risks, according to the head of the insurance exchange. While in a normal year insurance grows at the same rate as gross domestic product, it is now growing three times faster, Neal said in an interview with Bloomberg News.
“We’re in an unusual period of time where insurance is growing very fast,” he said.
Lloyd’s reported a pretax profit of £3.9 billion ($4.9 billion) for the first six months of the year, compared to a loss of £1.8 billion a year ago, when the outbreak of war in Ukraine and worries over the direction of inflation sent shockwaves through global markets.
For the six-month period, Lloyd’s returned £1.8 billion on its investments, compared to a loss of £3.1 billion a year ago, while its underwriting profit more than doubled to £2.5 billion as losses from major claims fell. Meanwhile, the group wrote £29.3 billion of premiums, a jump from £24 billion in the same period a year ago.
“We are reporting profitability that hasn’t been seen in a couple of decades,” Neal added.
According to Neal, insurance prices generally have risen about 9% over the past year. Lloyd’s of London typically sells insurance for large events such as shipwrecks and natural disasters, with the risks shared by its syndicates.
Photograph: Lloyd’s CEO John Neal; Photo credit: Chip Somodevilla/Getty Images
Topics Excess Surplus Lloyd's London
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