December 13, 2002 by Canadian Underwriter
The Lloyd’s of London insurance market says in 2003 it will hit its highest capacity ever, with an estimated US$22.44 billion (Cdn$35.02).
At a speech today in New York, Lloyd’s chairman Nick Prettejohn announced that market would leap over this year’s capacity of US$18 billion (Cdn$28.09 billion). The figure represents the maximum volume of insurance premiums the market can accept each year based on capital backing.
Reform currently taking place within the market is part of the reason for the increase, says Prettejohn. “In today’s business environment, no franchise or brand has the luxury of complacency or relaxation. Rather the capacity for constant self-analysis — identifying the need for change — is a source of competitive strength, and a relish for necessary change, however gut-wrenching the prospect, is the hallmark of success.”
He notes that over the last two years, nearly US$9 billion (Cdn$14.05 billion) in new capital has come into the market. “A telling statistic is that the market capitalization of Lloyd’s U.K. quoted businesses is around 50% higher today than in September last year. Lloyd’s has a diverse capital base and there is ample evidence from all constituencies of the resilience of that capital.”
He responded to concerns about the market following the September 11, 2001 terrorist attacks, focusing on the market’s ability to pay claims related to the loss. “We were asked several questions by the tragedy of September 11th, and we have shown the resources, financial flexibility and discipline to answer them.”
As Lloyd’s moves into the practice of reporting results on an annual basis, its 2002 financial results will be released in April, 2003.