Natural catastrophes push Lloyd's of London to £2 billion 2017 loss

  • Lloyd's of London reported a 2017 pretax loss of £2 billion ($2.80 billion).
  • The specialist insurance market was pushed into the red for the first time in six years after a record year for losses from natural disasters.
The interior of Lloyd's of London, the centuries-old insurance market, is pictured in central London on April 27, 2016.
Leon Neal | AFP | Getty Images
The interior of Lloyd's of London, the centuries-old insurance market, is pictured in central London on April 27, 2016.

Lloyd's of London reported a 2017 pretax loss of £2 billion ($2.80 billion), it said on Wednesday, pushing it into the red for the first time in six years after a record year for losses from natural disasters.

The specialist insurance market, which has been losing global market share, also said its planned EU subsidiary would be operational by July 2018, to cope with Britain's departure from the European Union.

Insurers suffered $135 billion in losses from natural catastrophes such as hurricanes, earthquakes and wildfires last year.

The £2 billion loss followed a pretax profit of £2.1 billion in 2016.

"The market experienced an exceptionally difficult year in 2017, driven by challenging market conditions and a significant impact from natural catastrophes," chief executive Inga Beale said in a trading statement.

Major claims more than doubled from a year earlier, to £4.5 billion in 2017, though the market said its capital position remains strong.

Lloyd's plans to get a license for its Brussels subsidiary and make the business operational by July, so that it is ready to write business by Jan 1, 2019, it said in its annual report.

It paid Beale £1.3 million last year, down 14.5 percent from 2016, the report showed.

The market's gross written premiums rose 12 percent to £33.6 billion, while the combined ratio, a measure of underwriting profit, weakened to 114 percent.

A level above 100 percent indicates a loss.

Return on capital was £1.8 billion, compared with 1.3 billion in 2016.