Its combined ratio saw an improvement of 2.4 percentage points
Lloyds of London has today announced a return to profit of £2.5bn (pre-tax) following the publication of its 2019 results, confirming that it is in a strong position to respond to the impacts of Covid-19.
John Neal, Lloyd’s chief executive said: “I am confident in Lloyd’s ability to meet the challenges before it, and in doing so demonstrate the market’s unrivalled ability to support people, businesses and countries around the world in response to the far-reaching impacts of Covid-19.”
He said he was pleased to announce Lloyd’s return to profitability and continued progress across priorities, its primary focus right now is on supporting our customers and business partners in their time of need.
This is underpinned by a strong performance across investments of 4.8%, whereas 2018 only saw a 0.7% return, alongside a sustained rate increases and improving underwriting discipline.
This is an improvement on the previous year as 2018 saw a loss of £1.0bn and an 8.8% return on capital (3.7%).
Although there has been a high degree of turbulence in the financial markets over recent weeks, as at 19 March Lloyd’s solvency ratio stood at 205%.
The strength of the market’s balance sheet has been further bolstered by Lloyd’s return to a profit of £2.5bn (2018: loss of £1.0bn) in 2019, bolstered by the improvement in investment markets in the first half of 2019.
Lloyd’s net resources were up by 8.6% at £30.6bn reflecting an exceptionally strong balance sheet and a central solvency ratio of 238%.
Its combined ratio saw an improvement of 2.4 percentage points to 102.1% compared to 104.5% in 2018, with the underlying 2019 accident year ratio improving to 96.0% (2018: 96.8%) exclusive of major claims.
Sharpened focus
John Neal, Lloyd’s chief executive said: “As we focus on supporting our business partners and customers during this time, it has also never been more important to accelerate progress on our ambition to create the most advanced insurance marketplace through the Future at Lloyd’s.
”We have sharpened our focus for 2020, prioritising initiatives that will ensure around 80% of Lloyd’s business is digitally supported, together with fast-tracking claims processing improvements and building the foundational data and technology infrastructure to support Lloyd’s future ecosystem.”
Laying the foundations
Meanwhile gross written premiums for the period totalled £35.9bn, marginally up from £35.5bn in 2018.
This equates to a reduction in GWP of 2.6% after eliminating positive foreign exchange rate movements and is underpinned by a risk adjusted rate increase of 5.4% indicating continued underwriting discipline across the market.
Lloyd’s paid £23.bn in gross claims, whereas in 2018 £19.7bn.
It’s central solvency and coverage ratio of 238% (2018: 249%). On 19 March this year it was 205%).
Bruce Carnegie-Brown, Lloyd’s chairman, added: “The beginning of 2020 has proved exceptionally difficult as Covid-19 spreads rapidly around the world with devastating consequences for families, communities and the global economy.
”Now more than ever, our customers need us to be ready to support them through these challenging times.
“At Lloyd’s, we are laying the foundations to do this more effectively. By focusing on performance management, modernising the market and creating a market culture that will attract the best and brightest talent, we are making the market more resilient, more successful and better placed to meet our customers’ needs.”
No comments yet