By Favour Nnabugwu
LLOYD’S of London has reported a 16 percent fall in profit to £1.22 billion for first half of 2017. However, Lloyd’s also reported a 16 percent increase in gross written premiums, an improved combined ratio, and a 78 percent improvement in the underwriting result, up from £206m last year to £366m in the first half of 2017.
Lloyd’s chief executive, Inga Beale, said that in conditions where there remains severe pressure on pricing across all lines of business, it was a “solid result”.
Gross written premiums increased by 16 percent to £18.9bn, while the combined ratio improved to 96.9 percent from 98.0 percent for the first half of 2016. Investment return was 1.5 percent compared to 1.8 percent.
The improvement in the underwriting result was driven by the low incidents of major losses, action taken to address underperforming lines of business, along with price and trading competition across other lines of businesses, said Lloyd’s.
It stressed that the figures do not take into account the recent storms faced by the Caribbean and the US, and instead reflect what had been, until recently, a relatively benign loss period. It added that, despite continuing pressure on pricing from excess capital and low interest rates, the development of new products has seen an increase in volumes.
“These results highlight the continued strength of the Lloyd’s market, but they do reflect the challenging conditions that have shaped the sector over recent years. Our focus on maintaining a strong underwriting discipline and concentrating on profitable lines of business is showing signs of success, but we cannot allow that focus to waver if we are to continue to ensure the Lloyd’s platform is the most attractive option for customers,” said Ms Beale.
She added: “Whilst these results do not cover the current hurricane season in the Caribbean and United States, the market is assessing claims and starting to make payments that will help local communities and businesses get back on their feet as quickly as possible. It is our ability to respond quickly and effectively in times like these that differentiates the Lloyd’s market and is ultimately what we are here to do.”
Lloyd’s said it is expecting net losses of $4.5bn (£3.4bn) related to losses in the Caribbean and Florida as a result of hurricanes Harvey and Irma.