Posted on 28 Sep 2010
Lloyd's of London on Tuesday posted a 53% fall in first-half pretax profit due to higher catastrophe claims and lower investment returns.
For the six months to June 30, Lloyd's posted a pretax profit of 628 million pounds ($995.3 million compared with 1.32 billion pounds a year earlier. Its investment returns fell to £597 million from £708 million.
Lloyd's said its combined ratio—a measure of claims against premiums— worsened to 98.7% from 91.6%. A figure below 100% indicates an underwriting profit while a higher number indicates lower profitability. Its central assets, which act as a form of capital buffer for member insurers, have risen to a record £2.23 billion in June, up from £2 billion a year earlier.
"The first six months of 2010 were the costliest on record since we began interim reporting, testing not only Lloyd's but insurers around the globe," said Chairman Peter Levene. "While events such as the Chilean earthquake and the Deepwater Horizon loss have proved challenging, paying these claims and supporting our policy holders is what we are here to do," Mr. Levene said.
In May, Lloyd's said that it estimates pretax claims from the Chile earthquake will be around $1.4 billion, with a further $300 million to $600 million from the Deepwater Horizon explosion in the Gulf of Mexico.