The U.K.’s Lloyd’s of London announced its interim financial results for the first half year ending June 30th, 2011, disclosing a whopping before tax £697m loss ($1.1bn) due to a record number of catastrophe claims this year. This compares with a £628m ($991.5m) profit for the same period last year, £1,322m profit in 1H 2009, £949m profit in 1H 2008, and £1,807m profit in 1H 2007.
Lloyd’s posted a net profit of £2,195m for the full year 2010, £3,868m net profit for full year 2009, £1,899m net profit for full year 2008, and £3,846m net profit for full year 2007.
Lloyd’s of London, founded in 1688, is the world’s leading insurance market, providing specialist insurance in over 200 countries and territories. Lloyd’s description on its Facebook page is more colorful and concise than it’s “About Lloyd’s” on its website:
“At Lloyd’s, we insure some of the world’s most complex risks, from hurricanes to terrorism, sporting events to space travel, and celebrity body parts to Santa’s beard. However unpredictable the risks we cover are, they do sometimes occur, and when they do, our reputation for managing the resulting claims honestly and professionally means that we are trusted to cover the risks that others can’t.”
Lloyd’s CEO Richard Ward talked with A.M. Best about the 1H results this weekend. He said: the results “demonstrate the business we’re in which is to provide businesses and people with risk management products that help them deal with catastrophic events and when these catastrophic events happen [] that we’re there to meet their claims and we’ve done that we’re paying out claims this year in the first half in U.S. dollars amounting to $4.5 billion dollars.”
Ward noted there have recently been catastrophic events in Australia, New Zealand, Japan and the U.S.
Lloyd’s disclosure that it had posted a loss of $£697m for 1H2011 was better than the loss forecast by accountancy firm Mazars Group, which said it would probably post a £1.5 billion loss ($2.37bn). Ward said that despite the huge loss Lloyd’s continues to be strongly positioned, with its net assets of £57 billion, to handle the difficult conditions underwriters now face.
Ward noted that even with the difficult and volatile market conditions, its conservative investment approach allows it to realize a small gain (1.1pc in 1H). Lloyd’s he said invests 1/3rd of assets in cash, 1’3rd in corporate bonds, and 1/3rd in government bonds.
