Lloyd’s insurers appalling motor results last year are revealed in a report by actuaries Ernst and Young.
The report shows that Equity Red Star’s net combined ratio (NCR) spiralled to 200% (2010) from a respectable 100% (2009).
KGM’s performed poorly, plummeting from a NCR of 140% to beyond 160%. Jubilee followed a similar trajectory declining from below 120% to more than 160%.
Brit was the best performer with an NCR in the low 130s, the report from a seminar for the 2010 results shows.
Analysts say it is important to view the Lloyd’s result in context. Part of the reason for the discrepancy is timing: the market outside Lloyd’s undertook the bulk of its reserve strengthening in 2009.
But even bearing this in mind, Lloyd's NCR was considerably worse than the market average of 120.6% in 2010.
Royal Bank of Scotland Insurance (RBSI) group was among one of the worst performers.
RBSI’s Direct Line, Churchill, UKI and NIG all languished between 140% and 170%.
RBSI also strengthened reserves considerably, between 15% and 30% of net earned premium, for Churchill, Direct Line and UKI.
The report estimates a combined operating rato of 111% this year and 109% the following year. Claims inflation will run at 9% in 2011 and 7% in 2012. Premium inflation will go up 12% this year and 8% next year.
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