Lloyd’s looks to Big Apple on back of record profits

COMING off a record year for profits, the chief executive of Lloyd’s of London said yesterday that the storied insurance group is participating in a study looking at creating a similar market in New York.

Lloyd’s said its annual pretax profit soared last year to a record £3.9 billion (€4.34bn), more than double the 2008 profit of £1.9bn. Results were aided by relatively light damage from Atlantic hurricanes and better investment performance.

But Richard Ward, Lloyd’s chief executive, warned that it would be hard for Lloyd’s to maintain its profitability at last year’s level.

And Lloyd’s is facing a possible challenge from Wall Street, after governor David A Paterson of New York in January announced that his administration was working to create an international insurance exchange modelled on Lloyd’s. New York failed in an earlier attempt to create such an exchange nearly three decades ago.

Mr Ward said that Lloyd’s was participating in a working group on setting up such a market with the New York insurance commissioner, James J Wrynn, and that the group was to issue its report in September.

“It’s a challenging time to be setting up an insurance entity, considering the downward pressure on rates and oversupply in the market,” Mr Ward said, adding it was too early to say if Lloyds would participate in the ultimate project.