26 March 2014 Insurance

Lloyd’s GWP hits new high; CEO eyes more growth

Helped by a benign year for catastrophes, Lloyd’s made a substantially improved profit in 2013 and its gross written premium reached a new high. Its new chief executive said the result represented a solid base from which it would target further international growth especially in under-insured economies.

The specialist insurance and reinsurance market made a profit of £3.2 billion for 2013, a 14 percent increase on the £2.8 billion it made in 2012. Its gross written premium income increased to £26.1 billion, a new record high for the market. Its combined ratio for 2013 was 86.8 percent compared with 91.1 percent the year before. Its pre-tax return on capital was 16.2 percent. Its capital position also strengthened with net resources of £21.1 billion.

The result was helped by 2013 being a benign year for insured catastrophes. Major claims for the market totalled just £873 million. Despite this, its total net incurred claims were £9.6 billion in 2013, down from £10.1 billion the previous year.

“Disciplined underwriting and a benign year for major catastrophes have enabled us to outperform our peers and post this outstanding profit of £3.2 billion,” said Inga Beale, Lloyd’s new CEO who took the role just months ago. “From this base, the Lloyd’s market has a great opportunity to expand in the underinsured, high growth economies around the world.

“We have started to build the foundations for this growth, as set out in our long term strategy ‘Vision 2025’, through close engagement with the market. We will continue to support our expert underwriters, through efficient operations, to attract capital and talent from these high growth economies.”

John Nelson, the chairman of Lloyd’s, added: “These are outstanding results for Lloyd’s and are a tribute to the talent and professionalism in the Lloyd’s market. Whilst we saw few catastrophe claims in 2013, continued low interest rates saw reduced investment income and high levels of capital continuing to flow into the market which put pressure on prices.

“These conditions look set to persist. I therefore expect increased competitive pressure on the market to remain in 2014. This underlines the need for continued underwriting discipline as we seek to maintain and reinforce our position as the global centre for specialist insurance and reinsurance.”

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