Lloyd’s reports plummet in profits

Lloyd’s has reported a pre-tax profit of US$1.889 billion for the first half of 2008, a sharp decrease from the pre-tax profit of US$3.32 billion reported in the same period of 2007.
The specialist insurance market reported a combined ratio of 89% for the first six months of 2008, representing a decline over the 82.9% it posted in 2007, a Lloyd’s release says.
The release contrasts this combined ratio result with those of U.S. property and casualty insurers (an estimated average of 99%), U.S. reinsurers (98%), the Bermuda market (86%) and European insurers and reinsurers (96%).
“We have reported a strong performance in extremely challenging circumstances,” said Lloyd’s chairman Lord Peter Levene. “The result reported for the first half comes as no surprise, with profits heavily influenced by falling investment income and increased cost of claims, while the second half will remain subject to the incidences of natural catastrophe.”
Richard Ward, Lloyd’s CEO, added: “The market remains in a good position to face the challenges ahead even though the external conditions in which we operate are about to test our structure and resolve.”