Following one of the costliest years for natural catastrophes in the past decade, Lloyd’s of London announced an aggregated market loss of US$2.7bn for 2017.
Lloyd’s Chief Executive, Inga Beale, said: “The market experienced an exceptionally difficult year in 2017, driven by challenging market conditions and a significant impact from natural catastrophes. These factors mean that for the first time in six years Lloyd’s is reporting a loss.
“Lloyd’s is here to support customers when it matters most, providing the financial support to enable businesses, governments, and most importantly people to recover and rebuild their lives as quickly as possible and I’m proud of the market’s response.”
The key financial figures are:
• Aggregated market pre-tax loss of $2.7bn (2016: Pre-tax profit of $2.6bn)
• Gross written premiums of $43.3bn (2016: $40.3bn)
• Major claims for 2017 were $5.8bn (2016: $2.8bn)
• Net investment return of $2.3bn (2016: $1.8bn)
• Combined ratio of 114.0 per cent (2016: 97.9 per cent)
Lloyd’s CFO John Parry said, “It was a very difficult year, not just because of the major claims activity.The market needs to continue pay attention to all aspects of that combined ratio.”
After a number of relatively benign catastrophe years, the frequency and scale of the disasters that struck around the world in the second half of 2017 saw major claims costing the Lloyd’s market $5.8bn, more than double the previous year (2016: $2.8bn).
This significant loss activity generated an underwriting loss of $4.4bn for 2017 (2016: $0.6bn profit), resulting in a combined ratio of 114.0 per cent (2016: 97.9 per cent).
A total of $23.6bn in claims gross of reinsurance was paid out by the Lloyd’s market during 2017, demonstrating the critical role the market plays in helping businesses, communities and countries recover quickly after disasters.
The Lloyd’s market has met these commitments without any significant impact on total resources which remain strong at $37.2bn. Lloyd’s ratings with the leading ratings agencies remain at A (excellent) from A.M. Best, A+ (strong) from Standard & Poor’s and AA- (very strong) from Fitch.