Lloyd’s of London posts increased profit in first half of 2009

Lloyd’s of London posted a pre-tax profit of £1.32 billion (Cdn$2.3 billion) in the first half of 2009, compared to £949-million (Cdn$1.66 billion) profit for the same period of 2008.
The result reflects continuing underwriting discipline and a relatively low level of catastrophe claims, the company said in a statement.
Lloyd’s first-half combined ratio of 91.6% (89% in 2008 H1) “continues to compare well with our peers who recorded an estimated average of 100% for U.S. property and casualty insurers,” Lloyd’s said.
Gross written premiums for the six months to June 2009 were £13.5 billion (Cdn$ 23.6 billion), an increase of 34.8% over the same period the previous year.
Lloyd’s attributed the increase to the stronger U.S. dollar. “Adjusting for exchange rate movements shows an increase of 9% in local currency, which is attributable to rate increases in catastrophe related classes and new business opportunities brought in to the market by new and established syndicates,” Lloyd’s said.
The insurance market reported an investment return of £708 million (Cdn$1.24 billion), almost double its total reported for the same period last year (£346 million, or Cdn$605.7 million, in 2008 H1). The insurer said a conservative investment mix largely contributed to the positive investment return.
“The first six months result has been achieved in what remain challenging circumstances,” Lloyd’s chairman Lord Peter Levine said.
“The market is in solid financial shape and business volumes have increased as a result of brokers and policyholders seeking to use the security of the Lloyd’s platform.
“External conditions, however, remain difficult with the U.S windstorm season and recessionary trends continuing to pose a threat to the insurance industry.”