Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

Insurance market Lloyd's of London returns to profit, braces for coronavirus

share with twitter share with LinkedIn share with facebook
share via e-mail
03/26/2020 | 05:47am EDT
Man enters the Lloyd's of London building in the City of London financial district

Lloyd's of London reported its first annual pretax profit in three years on Thursday, thanks to tighter underwriting and robust investment returns, and signalled it was well prepared to cope with the cost of the coronavirus pandemic.

The 330-year-old insurance market, which reports aggregate results of its syndicate members, posted profits of 2.5 billion pounds, up from losses of 1 billion pounds in 2018 and 2 billion pounds in 2017, when a slew of hurricanes, typhoons and wildfires ravaged its returns.

But it gave no early indications of the extent to which its members this year might be hurt by claims linked to the coronavirus outbreak, which has paralysed the global economy, forced the lockdown of billions of people and claimed thousands of lives worldwide.

Chief Executive John Neal told Reuters it would be another six to eight weeks before an approximate quantum and costs of claims could be estimated, with more than 14 insurance products seen to have some exposure or response to Covid-19.

"I don't think we have deep rooted concerns on the cost. It's what we do for a living," he said, adding that the market typically sets aside 10% of premiums received each year to help manage catastrophe claims.

Lloyd's of London insurers will be exposed to losses due to the cancellation of sports events and other mass gatherings, as well as the postponement of the Olympics, though the losses will be less severe than if the Games had been cancelled altogether, industry sources say.

Lloyd's solvency ratio - a key measure of balance sheet strength - was 205%, despite a high degree of turbulence in financial markets in recent weeks.

Its combined ratio, a measure of underwriting profitability, also strengthened to 102.1% from 104.5%. A level above 100 percent indicates a loss.

Lloyd's insurers include listed firms Beazley and Hiscox.

CULTURAL CATALYST

With thousands of Lloyd's brokers and underwriters now working remotely, Neal said "it had never been more important" to accelerate progress on its Future at Lloyd's modernisation plan, which would speed up claims processing and eventually see around 80% of its business supported digitally.

Lloyd's has shut its "underwriting room" - where insurers and brokers transact deals face-to-face - for the first time in its history due to the pandemic.

It had already started the process of moving the market to electronic exchanges, to streamline operations and cut costs and Neal said the Lloyd's community was so far coping well with the new working environment.

"If I was putting a percentage on it, I'd say the market is at 85 to 90% of efficiency," he said, with indicative volumes of activity on electronic trading tools up by between 20-30% over the past week.

"My sense is this crisis will ultimately be good for us. People want to accelerate the modernization agenda and demonstrate their ability to operate much more effectively digitally," he said.

"And the small minority who have asked whether we really need to do this are now quickly finding that they have lost the argument."

The syndicate is also battling a sexual harassment storm and is trying to beef up its record on diversity. Neal said senior management remained committed to the cultural revamp and would provide a progress update in the second quarter.

By Sinead Cruise

Stocks mentioned in the article
ChangeLast1st jan.
BEAZLEY PLC 7.73% 395.8 Delayed Quote.-28.81%
HISCOX LIMITED 1.63% 948.2 Delayed Quote.-33.41%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news "Economy & Forex"
01:03aU.S. weekly jobless claims seen hovering near record highs
RE
12:57aChinese molybdenum miner halts production after tailings spill
RE
12:46aSwiss financial watchdog welcomes UBS' and Credit Suisse's dividend decisions
RE
12:31aCatholic bishops, faith groups urge Trump to back debt relief for poor countries
RE
12:18aFINANCIAL STATEMENTS AND RELATED ANNOUNCEMENT : :Auditor's Comments of Accounts
PU
12:16aNEWS HIGHLIGHTS : Top Financial Services News of the Day
DJ
12:10aJapanese stocks slip in cautious mood despite Wall Street rally
RE
12:01aJapan's economy faces extreme uncertainty as coronavirus spreads - central bank head
RE
12:01aJapan's economy faces extreme uncertainty as coronavirus spreads - c.bank head
RE
04/08COVID-19 (Coronavirus) Drives Sub-Saharan Africa Toward First Recession in 25 Years
PU
Latest news "Economy & Forex"