Interim pre-tax profit drops to £949m.

Lloyd’s has announced an interim pre-tax profit of £949m for the six-month period ending 30 June, which is down from £1,807m the previous year.

The insurance market said the result reflects a soft market and a rise in attritional claims. It also said that a conservative investment mix has resulted in a positive return of approximately 1% (£346m) which outperformed many peers, but showed the impact of the volatility in the capital markets, with both equity and bond holding adversely affected.

Lloyd’s chairman Lord Levene said: “We have reported a strong performance in extremely challenging circumstances. 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 catastrophes.”

Lloyd’s chief executive Richard Ward 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.”

The market posted a combined ratio of 89%, which compares well to an estimated average of 99% for US property and casualty insurers. Bermuda had 86% and European insurers and reinsurers had 96%.

It also reported its strongest ever central assets of £1,936m.