- Pre-tax profit of £2.1bn (2014: £3.0bn).
- Return on capital of 9.1% (2014: 14.1%).
- Combined ratio of 90.0% (2014: 88.4%).
- Gross written premiums increase 6% to £26.7bn (2014: £25.3bn).
- Profits remain significant despite fall in investment returns and pressure on prices.
- Increasing financial strength demonstrates prudential resiliency
Lloyd’s ratings of A (excellent) by A.M. Best, AA- (very strong) by Fitch and A+ (strong) by Standard & Poor’s reflect its robust position. Lloyd’s competitive position on a global scale is driven by solid underwriting performance and diversity of global markets and product.
The approval of Lloyd’s internal model, a crucial step in securing the ability to operate within the new Solvency II regulatory regime was also a major achievement for the market.
Speaking about the results, Lloyd’s Chairman, John Nelson, said:
"The Lloyd’s market has shown its ingenuity and excellence once again, which is reflected by healthy profits in the midst of a challenging macro-economic climate.
“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.”
Lloyd’s Chief Executive, Inga Beale, said:
“Lloyd’s is pursuing its strategy to deliver risk solutions to a fast moving world, business looks to the Lloyd’s market to underwrite policies too complex for others to handle. Protection from cyber-attacks, terrorism and climate change are needed now more than ever.”
Results at a glance
|Return on capital
Notes to Editors:
- Lloyd’s 2015 Annual Report can be accessed at: www.lloyds.com/annualreport2015
- 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 (before taking into account investment returns). A ratio less than 100% is an underwriting profit.
- 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 and securities, amounted to £2,645million at 31 December 2015. The Society financial statements are drawn up under IFRS.
- Lloyd’s is rated AA- (very strong) with Fitch, A+ (strong) with Standard & Poor’s and A (excellent) with A.M. Best. Lloyd’s is currently on positive outlook with A.M. Best.
- Members’ resources operate on a several basis and are only available to meet each member’s share of claims. Central assets are available at the Council’s discretion to meet the liabilities of any member on a mutual basis.
- This press release includes forward-looking statements. These statements are based on currently available information. From 1 January 2015 Lloyd’s syndicates, like insurance companies reporting under UK GAAP transitioned to FRS102 and FRS103 from previously extant UK GAAP. The accounting policies adopted under FRS102 and FRS103 as regards underwriting transactions, are generally consistent with those under previous UK GAAP, and hence are generally consistent with the accounting policies adopted for the PFFS in 2014. 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 affecting 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.
- 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.
- Foreign exchange rates may materially fluctuate from the rates prevailing at 31 December 2015 (£1 = US$ 1.47, £1 = €1.36). Premiums, claims and investment income are translated at the average exchange rate for the year to 31 December 2015 (£1 = US$1.53, £1 = €1.38).
For further information, please contact:
Stewart Todd or Alex Dziedzan
Tel: +44 (0)20 7327 6272 Email: firstname.lastname@example.org
Tel: +44 (0)20 7327 6125 Email: email@example.com
Michelle Cunningham or Nicola Hartley
Tel: +44 (0)20 7327 5434 Email: firstname.lastname@example.org
Tel: +44 (0)20 7327 5757 Email: email@example.com
Lloyd's is the world's only specialist insurance and reinsurance market that offers a unique concentration of expertise and talent, backed by strong financial ratings and international licences. It is often the first to insure new, unusual or complex risks, providing innovative insurance solutions for local, cross border and global risks. Its strength lies in the diversity and expertise of the brokers and managing agents working at Lloyd’s, supported by capital from across the world. In 2016, more than 80 syndicates are underwriting insurance and reinsurance at Lloyd's, covering all lines of business from more than 200 countries and territories worldwide. Lloyd's is regulated by the Prudential Regulatory Authority and Financial Conduct Authority.