Pre-tax profits drop to £2.1bn in ‘challenging market’ conditions
Cyber insurance is a growing area of focus for Lloyd’s of London as it aims to meet its clients’ increased demand for cyber policies, Lloyd’s finance director John Parry said at the presentation of the market’s annual results for 2015.
The London-based insurance market’s pre-tax profits fell to £2.1bn ($2.96bn) last year from £3bn in 2014 owing to “the most challenging market conditions the industry has seen for many years”. Its combined ratio also worsened to 90%, compared with 88.4% in the previous year.
The underwriting result for the year slipped to £2.0bn from £2.3bn.
The London insurance market reported gross written premiums rose, however, by 6% to £26.7bn from £25.3bn, while return on capital slumped to 9.1% from 14.1%.
“The results demonstrate Lloyd’s continuing financial strength and sound market-wide performance despite a turbulent macro-economic backdrop and some of the most challenging market conditions the industry has seen for many years,” chairman John Nelson said.
“Each year brings a unique set of challenges, requiring determination, innovative thinking and solutions. This year has been no different. In a market undeniably tougher than seen for many years, we have had to demonstrate our ability to adapt and take action. In these conditions, these results are creditable and a tribute to the continued skill and professionalism of the Lloyd’s market underwriting community.”
He said the results were achieved in the face of lower investment returns and pressure on prices.
Lloyd’s said the results demonstrate its financial strength and sound market-wide performance in spite of a turbulent macro-economic backdrop and some of the most challenging market conditions the industry has seen for many years.
It also said its ratings of A (excellent) by AM Best, AA- (very strong) by Fitch and A+ (strong) by Standard & Poor’s reflects its robust position and said its competitive position on a global scale is driven by solid underwriting performance and diversity of global markets and product.