September 14, 2021 by Greg Meckbach
The Lloyd’s market has returned to profitability. The Corporation of Lloyd’s has reported a 2.1-point improvement in its attritional loss ratio, from 52.6% in during the first six months of 2020 to 50.5% in the first half of this year.
The combined ratio, for the Lloyd’s market, improved 18.2 points, from 110.4% in the first half of 2020 to 92.2% in the same period in 2021.
“I am encouraged to see that market performance has improved as a result of our ongoing remediation efforts,” Lloyd’s CEO John Neal said in a release.
The Corporation of Lloyd’s is not an insurance company or a broker. Instead, it oversees a market composed of some 50 managing agents, 76 syndicates and over 4,000 coverholders.
Canada is the third largest market for Lloyd’s after Britain and the United States. In Canada, Lloyd’s Underwriters ranked third, behind Intact and Desjardins, in the P&C market, with $4.39 billion in net premiums written in 2020, according to the 2021 Canadian Underwriter Statistical Guide, powered by MSA Research.
In 2018, the Corporation of Lloyd’s told syndicates to thoroughly review the worst-performing 10% of their portfolios. The Lloyd’s market lost money in both 2017 and 2018, returning to profitability in 2019.
Lloyd’s also reported a loss, before tax, of £1.432 billion in the first six months of 2020, due mainly to COVID-19. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. As a result, insurers paid billions on a variety of losses including event cancellation, business interruption and lawsuits.
On Sept 9, 2021, Lloyd’s reported a profit before tax of £438 million in the first six months of 2020. The British pound closed Sept. 13 at Cdn$1.75.
In 2020, the Lloyd’s market reported £2.6 billion in major claims. Of that, £2.4 billion was attributed to the ongoing pandemic. The Lloyd’s markets other major claims events, in the first half of 2020, were Tennessee tornadoes (£100 million) and Australia wildfire (£100 million).
In the first half of 2021, there was one major claim event – Winter Storm Uri – which caused the Lloyd’s market to pay out £800 million in claims.
Gross written premiums increased slightly from £20.2 billion in the first half of 2020 to £20.5 billion in the same period in 2021.
On March 31, 2021, Lloyd’s was forecasting it would ultimately pay £6.2 billion, on a gross basis, in COVID-19 claims.
Excluding COVID-19 claims, the combined ratio improved 4.8 points from 97% in the first six months of 2020 to 92.2% in the first half of this year.
Feature image via iStock.com/deepblue4you