Lloyd's of London first half profits quadruple on investment gains

Key Points
  • The results at the 330-year old insurance market compare with a profit of 0.6 billion pounds a year earlier.
Lloyd's of London: Seeing results from underwriting performance strategy

The 330-year old specialist insurance market Lloyd's of London reported a first-half pre-tax profit of 2.3 billion pounds ($2.87 billion) on Thursday, up nearly fourfold on investment gains and a cutback in underperforming business.

Lloyd's, which covers commercial risks from oil risks to footballers' legs, suffered steep losses in 2017 and 2018 due to natural catastrophes such as hurricanes, typhoons and wildfires.

Lloyd's last year told its 99 member syndicates to ditch the worst performing 10% of their businesses.

"It is encouraging that the Lloyd's market is showing increased discipline in 2019," Chief Executive John Neal said in a statement.

"We need to make some brave choices on how to meet the expectations of our customers and all our stakeholders in the future."

The market has proposed its members move to electronic exchanges next year, as it responds to competition from cheaper rivals.

Further details of the strategic changes will be released on Sept 30. Net investment income rose to 2.3 billion pounds from 0.2 billion a year earlier, helped by strong equity returns.

Gross written premiums rose 1.7% to 19.7 billion pounds but the company's combined ratio, a measure of underwriting performance in which a level below 100% indicates a profit, weakened to 98.8% from 95.5%.

The results compare with a profit of 0.6 billion pounds a year ago.

Premium rates rose by an average of 3.9%, Lloyd's said. Lloyd's in May asked the Banking Standards Board to conduct a survey of the insurance market's 45,000 participants on issues such as honesty and respect to help to improve its working environment, following allegations of sexual harassment at member firms.