Lloyd’s reports net US$180 million loss after hurricanes

Citing net claims of 3.309 billion (US$5.79 billion) as a result of the “most severe hurricane season on record,” Lloyd’s of London reported a net loss of 103 million (US$180 million) in 2005, compared to a profit in 2004 of 1.367 billion (US$2.39 billion).
Lloyd’s combined ratio in 2005 reached 111.8%. In 2004, the combined ratio was 96.6%
“2005 was the worst year on record for natural disasters, costing the insurance industry far more than the impact of the 9-11 attacks on New York,” Lloyd’s chair Lord Levene commented. “For Lloyd’s to emerge from such a year with just a small loss represents an excellent performance by the market.
“That outcome would have been unthinkable just a few years ago, which is the true measure of the progress Lloyd’s has made.
“There are many lessons for the industry from a year of unprecedented devastation from natural perils. We must not fall into the trap of thinking that 2005 was a freak year that could never happen again. We must continue to improve the way we model potential risk and spread our exposures. We must only accept risk at an adequate price and on the right terms.”
In 2006, Lloyd’s has the capacity to write 14.8 billion (US$25.91 billion) of business an increase of 7% on 2005 (13.8 billion, or US$24.16 billion), Lloyd’s reported in its 2005 year-end statements. “This compares with the position before the hurricanes when, with rates softening, it was expected Lloyd’s capacity would reduce by around 7% in 2006,” Lloyd’s reports on its Web site. “This change in approach demonstrated the ability of the Lloyd’s market and the franchise performance team to react speedily to changing market opportunities.”
Lloyd’s wrote gross written premiums of 14.982 billion (US$26.23 billion) in 2005, compared with 14.614 billion (US$25.59 billion) in 2004.