UK insurance market counts cost of storm damage

The Lloyd’s of London insurance market overcame a costly year for hurricane claims by unveiling annual profits of £1.36bn (€2bn) today.

The figure is down from the £1.89bn (€2.7bn) reported a year earlier but came in spite of a £1.2bn (€1.7bn) bill for storm damage in the United States and the “worst-ever year” for industry losses from natural catastrophes.

Lloyd’s, which has staged a series of reforms in recent years to modernise the market, said such a result would have been “unthinkable” a few years ago.

Among recent changes, Lloyd’s has introduced a new franchise structure and phased out the number of Names who backed the market with an unlimited liability. There are 62 syndicates who underwrite insurance at Lloyd’s.

Today’s results build on the progress made in 2003 and 2002, when it reported its first profits figure since 1996.

Chief executive Nick Prettejohn said: “Lloyd’s performance compared well with our global competitors. However, we must remain vigilant if we are to continue to deliver a strong underwriting performance.

“Market conditions remain profitable but increasingly competitive in a number of lines.”