The 328-year-old Lloyd’s market, which houses hundreds of brokers and underwriters, brought in £16.31bn from new premiums between January and June, 5pc higher than last year, although this increase is just 0.6pc when currency movements are stripped out.
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The combined ratio, which calculates losses and expenses as a proportion of earned premiums, largely seen as the benchmark indicator for performance in the insurance sector, climbed to 98 per cent, up from 89.5 per cent previous year.
“Lloyd’s combined ratio increased to 98.0% for the first six months of 2016 due to an increase in expense and attritional loss ratios, an increase in catastrophe losses, and a reduction in reserve releases”, the report said. The figures show an increase in profits of 0.26 billion pounds from the same period a year ago for the world’s specialist insurance and reinsurance market.
Chief executive Inga Beale told the BBC Lloyd’s may set up a subsidiary or branches elsewhere in Europe if Britain leaves the EU.
Annualised return on capital rose to 11.7 per cent from 10.7 per cent in 2015.
Chairman John Nelson added: “Whilst we are operating in hard conditions, we have continued to make significant progress in growing our presence in the fast-growth markets across the globe”. For example, Nelson said that in 2016, Lloyd’s applied for offshore reinsurance licences in India and Malaysis and opened a new office in Bogotà, Colombia. “This complements the growth we are seeing in Dubai, China and in our more traditional markets, particularly the US”, Nelson said.
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Insurance market Lloyd’s of London has said it is putting plans in place that will ensure it continues trading across Europe following Brexit, weeks after its chairman warned that the group could be forced to move parts of its business to the EU. For Lloyd’s and other leading United Kingdom financial services players, therefore, the strategic answer seems – sooner or later – to be to move part of their operations across the Channel.
