The market’s return to profit follows the severe catastrophe experience in 2017, with the result supported by an improved combined ratio of 95.5% (June 2017: 96.9%). Lloyd’s also reported a modest increase in gross written premiums to £19.3bn (June 2017: £18.9bn), driven by improvements in pricing and growth in some profitable lines.
The reporting period also featured an improvement in the underwriting result up to £0.5bn from £0.4bn last year. This partly reflects Lloyd’s ongoing work that commenced in 2017 to review the worst performing portfolios, and the subsequent action by the market to reduce loss making lines.
Pre-tax profits were impacted by a reduced investment return of £0.2bn (June 2017: £1.0bn), which is consistent with the low returns seen across most asset classes over the period.
Lloyd’s capital position is at its strongest ever with net resources totalling £29.0bn (June 2017: £28.0bn). Lloyd’s strong and secure financial position is underscored by our ratings which were recently reaffirmed at A (Excellent) from A.M. Best, A+ (Strong) from Standard & Poor’s and AA- (Very Strong) from Fitch.
Lloyd’s Chief Executive, Inga Beale, said:
“These results and return to profit demonstrate the strength of the Lloyd’s market following one of the costliest years for natural catastrophes in the past decade. Whilst these results are welcome, Lloyd’s continues to concentrate on improving the Lloyd’s market’s long-term performance by taking action to address underperforming areas of the market.
“The Corporation also remains focused on making the Lloyd’s platform more competitive. Alongside the success of the mandate for the placement of electronic risks, we have recently launched the Lloyd’s Lab, our new innovation accelerator, which will help Lloyd’s use technology to better serve our customers around the world. We have also worked tirelessly to secure the Lloyd’s market’s access to the EU27 and our Lloyd’s Brussels subsidiary will start writing business in the European Economic Area from 1 January 2019.”