Lloyd’s profits up 39pc amid bond rebound
LLOYD’S of London, the City’s 321-year old insurance market, yesterday unveiled bumper first-half profits after a recovery in corporate bond markets helped boost returns on its investment portfolio.
Chief executive Richard Ward said the market had booked profits of £1.32bn during the first six months of the year – a 39 per cent rise on the same period last year. This was thanks mainly to a £708m investment return, versus £346m last year.
Lloyd’s also unveiled a rise in gross written premiums – the volume of insurance sold by the market – to £13.4bn, a 35 per cent rise on the first half of 2008.
Lord Levene, the former Lord Mayor of London that chairs Lloyd’s, said: “The market is in solid financial shape and business volumes have increased as a result of brokers and policyholders seeking to use the security of the Lloyd’s platform.”
But he warned that it would not be plain sailing from now on, and said that the market was still heavily exposed to theupcoming UShurricane season and aftershocks from the financial crisis.
Finance director Luke Savage said that while areas like property and energy insurance had seen improved rates, they were still flat elsewhere.
He added the market was now very highly capitalised, with almost £17bn on its balance sheet, and said its central fund of reserves had risen to £2bn from £1.9bn.
He said the market’s combined ratio – a measure of profits where figures under 100 per cent indicate a profit while figures above show a loss – was 91.6 per cent.
This was down on the 89 per cent ratio seen in the first half of 2008, but still stronger than the 99 per cent ratio seen at other European insurers, Savage added.