Posted on 27 Jun 2013 by Neilson
Record levels of market capacity and spiralling pre-tax profits last year have boosted the attractiveness of Lloyd's market, according to an update report by Aon Benfield Analytics' market analysis team.
Key findings within the report showed that Lloyd's reported a pre-tax profit of £2.8bn for 2012, following a loss of £500m in 2011. This represented a return on capital employed of 14.8%.
Gross written premiums rose by 8.6% to £25.5bn, aided by an average risk-adjusted rate increase of 3% and transfers of business from the company market.
The underwriting result represented a profit of £1.7bn, after a loss of £1.2bn in 2011, while the combined ratio improved from 106.8% to 91.1%.
The overall surplus on prior year reserves stood at £1.4bn, up £200m in the previous year. The net cost of large losses was £1.8bn (2011: £4.6bn), representing 9.7% (25.5%) of net premiums earned, of which £1.4bn related to Hurricane Sandy.
The report also highlighted a total investment return rise of 37% to £1.3bn, the increase being driven by capital gains on bonds and equities.
Commenting on the report, Mike Van Slooten, international head of market analysis at Aon Benfield Analytics, said: "The continued attractiveness of the Lloyd's platform is reflected in record levels of market capacity and high levels of M&A (mergers and acquistions) activity. The market has outlined its long-term strategy to grow, internationalise and diversify in ‘Vision 2025'."