Aon Benfield, reinsurance intermediary and capital advisor, today announces the launch of its latest review of the Lloyd’s marketplace, which analyses the financial performance of the organization during the first half of the year.
The new report, Lloyd’s Update, reveals that Lloyd’s 1H pre-tax profit totalled GBP628 million – a decrease of GBP694 million on the prior year period – while gross premiums written remained virtually unchanged over 1H 2009, totalling GBP13.5 billion.
The lower result was due to a combination of factors including decreased investment yields and a softening rates environment. However, a large increase in catastrophe claims was the single biggest factor in Lloyd’s profits decline – exposure to the Chilean earthquake and Deepwater Horizon oil rig disaster resulted in net claims estimated at USD1.4 billion and USD300-600 million respectively.
Mike Van Slooten, head of Aon Benfield’s International Research team, added: “Catastrophe claims are a fact of life at Lloyd’s and allow the market to reinforce its claims-paying credentials. More importantly, the underlying underwriting performance remains resilient, which is evidence of the good discipline instilled by the Franchise Performance Directorate.”
Throughout 2010, Lloyd’s continued to be an attractive destination for capital, with interest being shown both from existing players looking to increase their position at Lloyd’s, and new capital seeking to make an entrance into the marketplace.
Meanwhile, the organisation continues to be proactive in its preparations for Solvency II, the new European regulatory regime that is due to be implemented in 2013. Lloyd’s management forecasts that overall regulatory capital requirements will increase by 5-10 percent under Solvency II provided the market’s internal model is approved by the U.K. regulator.
Source : Aon Benfield Press Release
