Lloyd’s posts £3.4bn underwriting loss for 2017

Lloyd’s has posted its first aggregate pre-tax loss in six years as major claims more than doubled in 2017, causing an underwriting loss of £3.4 billion.

Overall, the market reported an aggregated pre-tax loss of £2 billion for 2017 after a pre-tax profit of £2.1 billion in 2016. Major claims for 2017 more than doubled to £4.5 billion from £2.1 billion over the period. This “significant” claims activity generated an underwriting loss of £3.4 billion for 2017 after a £0.5 billion profit in 2016, and resulted in a combined ratio of 114.0 percent after 97.9 percent in 2016, according to a company statement.

“The market experienced an exceptionally difficult year in 2017, driven by challenging market conditions and a significant impact from natural catastrophes,” said Lloyd’s CEO Inga Beale. “These factors mean that for the first time in six years Lloyd’s is reporting a loss,” Beale added.

The Lloyd’s market has paid a total of £18.3 billion in claims gross of reinsurance during 2017. Nevertheless, total resources remain “strong” at £27.6 billion, according to the statement. Lloyd’s capital position continues to be “robust” and the ratings with the leading ratings agencies remain at A (excellent) from AM Best, A+ (strong) from Standard & Poor’s and AA- (very strong) from Fitch.

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