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03

Lloyd's posts £516m loss for 2011

Open-access content Wednesday 28th March 2012 — updated 5.13pm, Wednesday 29th April 2020

Lloyd’s of London has posted a £516m loss for 2011 after experiencing the largest annual catastrophe claims bill in its 324-year history.

2

The insurance market today revealed it incurred total net claims of £12.9bn last year, including £4.6bn of catastrophe claims. The loss before tax compares with 2010 when it recorded a profit of £2.195bn.

Lloyd's cited a series of major catastrophes last year, including flooding in Australia in January, the second earthquake in New Zealand in February, the Japanese earthquake and tsunami the next month and floods in Thailand which began in July.

For the insurance industry as a whole, total claims from natural catastrophes last year were $107bn, Lloyd's noted. Last year was the second costliest on record in terms of catastrophe claims received by the insurance industry.

Lloyd's chief executive, Richard Ward, said: 'Make no mistake, 2011 was a difficult year for the insurance industry. Given the scale of the claims, a loss is unsurprising but it reflects what we're here to do - help communities and businesses rebuild after disaster.

Mr Ward said, however, that the market's financial strength had been 'maintained'. This was due to its 'robust oversight and professionalism'.

Today's results show that the total resources of the Society of Lloyd's and its members were £58,870m last year, compared £55,230m the previous year. Its central assets also increased slightly - up to £2,388m from £2,377m in 2010.

Investment return for 2011 was £955m, compared to £1,258m in 2010, and Lloyd's had prior year reserve surpluses of £1,173m, compared to £1,016m the previous year.

Despite his positive assessment of the insurer's situation, Mr Ward said: 'I am disappointed that, given the exceptional level of catastrophes in 2011, insurance rates have not responded more positively. These events demonstrate the need for the industry to show discipline in terms of pricing.'

And chairman John Nelson added: '2012 remains challenging for insurers with tough economic conditions globally. It is vital that the market continues to take a disciplined approach to underwriting.'

This article appeared in our March 2012 issue of The Actuary .
Click here to view this issue

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