Lloyd's plunges to £438m loss in 'exceptionally challenging' H1 on £5bn COVID-19 hit
Specialist re/insurance market Lloyd's of London plunged to a loss of £438 million, driven by £2.4 billion in COVID-19 losses, in what its chief executive John Neal described as an "exceptionally challenging" first half of 2020.
Lloyd’s said it expects to pay out up to £5 billion in COVID-19 claims on a gross basis. In the first six months of 2020, Lloyd’s COVID-19 claims after reinsurance recoveries totalled £2.4 billion, contributing 18.7 percent to the market’s combined ratio of 110.4 percent and driving an overall market loss of £0.4 billion (£438 million).
Excluding COVID-19 claims, the market's combined ratio improved at 91.7 percent, down from 98.8 percent in H1 2019. This was supported by a 7.1 percentage point improvement in the attritional loss ratio which has dropped to 52.6 percent. The market's gross written premiums were £20 billion in the period, compared with £19.7 billion in H1 2019.
Lloyd's highlighted its "strong capital and solvency position" with net resources rising by 7.2 percent to £32.8 billion as at 30 June 2020 (FY 2019: £30.6bn), with a central solvency ratio of 250 percent.
Neal, CEO of Lloyd’s, said: “The first half of 2020 has been an exceptionally challenging period for our people, our customers, and for economies around the world. The pandemic has inflicted catastrophic societal and economic damage calling for unparalleled measures to stifle the spread of the virus, and to get businesses and economies back on their feet.
"Our half year results demonstrate that our robust approach to performance management and remediation has begun to take effect, evidenced by a significant turnaround in the underlying performance metrics, which give the truest indication of our market’s profitability.”
