2011-09-21
By staff reporter
Lloyd’s has announced an interim loss before tax of £697m for the six-month period ending 30 June 2011 (£628m profit, June 2010). The result follows the costliest first six months on record for major catastrophes for the insurance industry, with 2011 already likely to be the second most expensive year ever for insurers.
Lloyd’s investment mix has resulted in a positive return of £548m, despite the continuing volatility in financial markets. Central assets are at a record high, leaving the market well capitalised despite the high level of claims.
Commenting on the results, Lloyd’s chairman, Lord Levene, says, “2011 has already been one of the most challenging years on record for the insurance industry with major natural catastrophes devastating communities in Australia, New Zealand, Japan and the US Lloyd’s ability to pay billions in claims to help these communities rebuild is unquestioned and the fact that we have managed to do so without any call on our central capital reserves is testament to the market’s exposure management.”
Lloyd’s chief executive, Richard Ward, adds, “These are tough times for the insurance industry, but we are well positioned to handle them. Despite incurring £6.7bn in claims from the costliest first half year on record, Lloyd’s entered the second half of the year with £57bn in net assets* to support our business and pay claims. However, while interest rates are low and equity markets are volatile, we can’t rely on investment income to subsidise our underwriting, we must decline under-priced risks.”
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