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Lloyd’s rebounds to £1.43bn profit after underwriting ‘turnaround’

Lloyd’s has reported profit of £1.43bn for the first half of this year from a loss of £438m, after underwriting returned to £963m profit following a £1.31bn loss in the same period of 2020, helped by average premium rate increases of 9.9%.

Lloyd’s said the results mark a “turnaround” for the market, having shed about 6% of underperforming business to improve profitability.

The market’s combined ratio closed the half-year at 92.2%, from 110.4% in H1 2020.

Lloyd’s said growth for the first time in four years of 4%, alongside premium rate increases for the 15th consecutive quarter in Q2, helped increase gross written premiums by £500m, or 2%, to £20.5bn for the half-year period. Excluding the impact of foreign exchange and growth from new syndicates, premiums increased 8% during the first half.

CEO John Neal said Lloyd’s has settled £9.4bn in claims during H1 and paid 80% of Covid-19 claims notified.

“Market performance has improved as a result of our ongoing remediation efforts. This… brings Lloyd’s performance in line with our global peer group,” Mr Neal said.

He added that Lloyd’s’ performance management focus will “heighten” on cyber and financial lines classes next year.

Casualty was the only class of business to remain in the red for H1 2021, reporting underwriting losses of £44m. But this is down from a loss of £386m in the first half of last year.

Property accounted for the bulk of last year’s H1 underwriting loss at £1bn, but led other classes with a profit of £281m for the first six months of 2021.

Reinsurance turned around an underwriting loss of £256m for H1 2020, to add £199m to Lloyd’s’ profit total in the same period this year.

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