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Moody’s predicts GBP1 billion profit for Lloyd’s in 2005


April 3, 2005   by Canadian Underwriter


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Moody’s Investor Service says the Lloyd’s market could produce overall profit of GBP1.2 billion, or 9% of capacity for the 2005 year of account. The “meaningful” profit expected by Moody’s assumes a normal loss year, and would lead to an expectation of GBP6 billion in profit for the years 2002-2005.
“For 2005, although rates have reduced, overall conditions remain in line with those experienced in 1995 according to Moody’s Underwriting Index,” the report notes.
Moody’s has lowered its expectations for profits in 2002 to 11% of capacity, as a result of reserve deterioration, the increased costs attributed to run-off syndicates and foreign exchange adjustments.
For 2003, the expectation of profits of GBP2.2 billion, or 15% of capacity have been maintained due to a lack of major loss activity.
And 2004 profit expectations have been lowered to GBP1.2 billion, or 8% of capacity. This is largely the result of 2004 hurricane losses, with could cost about 7% of capacity, Moody’s predicts.


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