London market has held up well in the face of the costliest year on record
Lloyd’s results dominated the headlines today as the London market came in with better than expected figures for 2011.
Despite net claims totalling £12.9bn stemming from the costliest catastrophe year on record, which included the Australian floods, the Japanese earthquake and tsunami and the Thai floods, Lloyd’s only made a before-tax loss of £516m. The market’s robustness was evidenced by the profit it turned in the second half of the year, particularly in a continuing low interest environment.
Disappointing though they were compared to the previous year’s results of £2.2bn, given the scale of claims a loss was not surprising, according to Lloyd’s chief executive Richard Ward.
Another plus was the market maintaining its financial strength. This is testament to Lloyd’s approach to business.
However, one sticking point that remains to be resolved is the lack of rate hardening in light of the unprecedented series of global natural disasters last year.
Insurers praised …
Today proved to be a good day for the industry as a whole with insurers being praised for their role in the aftermath of the 2011 UK riots in the Riots Communities and Victims Panel report.
The report will be well received by insurers for its recommendation that the Riots (Damages) Act 1886 be widened to include cover for loss of motor vehicles and to improve the legislation generally.
… but more frustrations ahead
There could be more gloom ahead for the sector on the Solvency II front after it was announced that the plenary vote on Omnibus II was put back, potentially delaying its implementation date until January 2015.
Having passed the crucial vote on Omnibus II earlier this month, the European Parliament looked to be making big strides with the introduction of the regulatory regime, but this latest setback does nothing to affirm whether the initial deadline set will be adhered to and will only serve to frustrate companies that have been working hard towards meeting the new standards.