Canadian Underwriter

Costly nat cats lead to first market loss for Lloyd’s in six years

March 21, 2018   by Staff

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weather-02A series of costly natural disasters that struck during the second half of 2017 saw Lloyd’s pay out US$5.8 billion in major claims last year, up from US$2.8 billion in 2016.

Lloyd’s published its Annual Report for 2017 on Wednesday. The specialist insurance and reinsurance market reported an aggregated pre-tax loss of US$2.7 billion for the year.

“The market experienced an exceptionally difficult year in 2017, driven by challenging market conditions and a significant impact from natural catastrophes,” Lloyd’s CEO Inga Beale said in a news release. “These factors mean that for the first time in six years Lloyd’s is reporting a loss.”

Lloyd’s had US$43.3 billion in gross written premiums in 2017, up from US$40.3 billion. But its combined ratio deteriorated to 114%—up from 97.9% last year.

The Lloyd’s market paid out US$23.6 billion in claims gross of reinsurance for the year, but its total resources remain at US$37.2 billion. Its investment return was US$2.3 billion in 2017, up from US$1.8 billion in 2016.

In Canada, Lloyd’s had a 6% increase in net written premiums in 2017, driven by strong primary insurance growth. Its underwriting income returned to historical norms at $425 million. Lloyd’s also saw its market share in specialty commercial lines in Canada increase.

“Lloyd’s is here to support customers when it matters most, providing the financial support to enable businesses, governments, and most importantly people to recover and rebuild their lives as quickly as possible and I’m proud of the market’s response,” Beale said.

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This story was originally published by Canadian Insurance Top Broker.