Lloyd's - Lloyd's reports 2008 interim results

A combined ratio is a measure of an insurer’s underwriting profitability based on the ratio of net incurred claims plus net operating expenses to net earned premiums. A combined ratio of 100% is break even. A ratio of over 100% is a loss; less than 100% is a profit.

Sources of combined ratios figures for international peer groups (i) US P&C industry 98.5% (93.0%, June 2007) - Insurance Information Institute (estimate - September 2008), (ii) US r/i industry 97.5% (90.0%, June 2007) - Reinsurance Association of America (August 2008), (iii) Bermuda 85.6% (86.4%, June 2007), Europe P&C & r/I industry 96.3% (97.3%, June 2007)- Company Returns / Lloyd's analysis (September 2008).

Central assets include the assets of the Central Fund and the other assets of the Corporation. In aggregate, the value of Lloyd's central assets, excluding the callable layer and the liability in respect of the subordinated debt, amounted to £1,936m ($3,853m) at June 2008.

Balance due to/from Members and Funds at Lloyd’s represent the aggregate of each member’s resources. These resources operate on a several basis and are only available to meet each member’s share of claims. Central Assets are available at Council’s discretion to meet the liabilities of any member on a mutual basis.

Foreign exchange rates may materially fluctuate from the rates prevailing at 30 June 2008, (£1 = US$1.99, £1 = €1.26)

This press release includes forward-looking statements. These statements are based on currently available information and consistent accounting policies as applied at 30 June 2008. They reflect Lloyd’s current expectations, projections and forecasts about future events and financial performance. All forward-looking statements address matters that involve risks, uncertainties and assumptions. Based on a number of factors, actual results could vary materially from those anticipated by the forward-looking statements. These factors include, but are not limited to, the following:

- rates and terms and conditions of policies may vary from those anticipated;
- actual claims paid and the timing of such payments may vary from estimated claims and estimated timings of payments, taking into account the preliminary nature of such estimates;
- claims and loss activity may be greater or more severe than anticipated, including as a result of natural or man-made catastrophic events;
- competition on the basis of pricing, capacity, coverage terms or other factors may be greater than anticipated;
- reinsurance placed with third parties may not be fully recoverable, or may not be paid on a timely basis, or such reinsurance from creditworthy reinsurers may not be available or may not be available on commercially attractive terms;
- developments in the financial and capital markets may adversely affect investments of capital and premiums, or the availability of equity capital or debt;
- changes in legal, regulatory, tax or accounting environments in relevant countries may adversely affect (i) Lloyd’s ability to offer its products or attract capital, (ii) claims experience, (iii) financial return, or (iv) competitiveness; and
- economic contraction or other changes in general economic conditions could adversely affect (i) the market for insurance generally or for certain products offered by Lloyd’s, or (ii) other factors relevant to Lloyd’s performance.

The foregoing list of factors is not comprehensive, and should be read in conjunction with other cautionary statements that are included herein or elsewhere. Lloyd’s undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.