Lloyd’s is today reporting profits of £1.9 billion for 2008, the second costliest year for insurers to date.
"Given the financial crisis that has unravelled over the last year and the scale of catastrophes, our results represent a solid performance and better than we might perhaps have expected in such a turbulent year," Richard Ward, Lloyd’s CEO, said.
> Watch video interview with Richard Ward
While 2008 will go down in financial history as one of the most tumultuous on record, it was also a tragic one for the families of the 240,000 people around the world who were victims of large scale natural catastrophes.
Hurricanes, cyclones, earthquakes, floods and wildfires have cost the insurance industry in the region of £193 billion and Lloyd’s approximately £1.8 billion.
Key features of the 2008 results
In a year that reports Lloyd’s third highest profits, benefits also arose from foreign exchange rate movements and a positive shift in investment returns in December, resulting in:
Underwriting performance of £1,198m, including currency gains
Investment performance of £957m
Currency movements of £853m
Commentators’ references in the past few months to Lloyd’s as a ‘safe haven’ and an ‘oasis of calm‘ in the current economic environment can be attributed to a strong capital position with solvency that has improved year on year, stable ratings, and patent attractiveness to worldwide markets, with Lloyd’s writing approximately £18 billion worth of business in 2008.
“New businesses are continuing to join Lloyd’s, proving the competitiveness and attractiveness of the Lloyd’s franchise,” said Ward.
Ongoing improvements to the efficiency of the market further enhance Lloyd’s profile as a commercial front runner, he added.
Outlook
Underwriting discipline and risk management will continue to dominate Lloyd’s strategy. While general insurance hasn’t escaped the effects of the recession, the downturn’s impact on the industry has been limited. That picture is borne out by Lloyd’s 2008 results.
“Overall, the results and the underlying strength of the market are not a case of luck but strategy and good judgement,” Ward said, emphasising that the strong position is not only a buttress against the economic climate but ensures Lloyd’s readiness for future opportunities.
“However, we can’t afford to be complacent,” he said. “The coming year will be tough and so our focus remains very much on underwriting discipline, sound risk management and continuing to improve the efficiency of the market and the attractiveness of the Lloyd’s franchise.”
You need to upgrade your Flash Player
