Log in
E-mail
Password
Show 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
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

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

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


ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
BEAZLEY PLC -1.02% 390 Delayed Quote.6.97%
DEERE & COMPANY -0.64% 349.25 Delayed Quote.30.64%
HISCOX LTD -2.10% 849.8 Delayed Quote.-14.51%
MEMBERS CO., LTD. 4.07% 3450 End-of-day quote.48.77%
Latest news "Economy & Forex"
11:52aPRESIDENCY OF REPUBLIC OF TURKEY : “We have established a social welfare system that leaves no one unprotected in our country”
PU
11:10aHuawei CFO leaves Canada after U.S. agreement on fraud charges, detained Canadians head home
RE
10:55aChina welcomes Huawei executive home, but silent on freed Canadians
RE
10:29aIndia merger of Sony, Zee to create TV powerhouse challenging Disney
RE
10:21aVietnam to relax COVID-19 restrictions to revive pandemic-hit economy
RE
09:55aHuawei's Meng arrives in Shenzhen after release from Canada
RE
09:55aHuawei chief financial officer meng wanzhou arrives in shenzhen, china after release from canada
RE
09:48aHundreds of Russians join Moscow protest over parliamentary election
RE
09:14aTwo Canadian detained by China for more than 1000 days return home -local media
RE
09:14aTwo canadians detained in china for more than 1,000 days arrive in calgary, received by prime minister justin trudeau-local media
RE
Latest news "Economy & Forex"