Lloyd’s Puts 2003 Profits at $3.387 Billion

April 7, 2004

While other insurers had a good year in 2003, Lloyd’s had a great one. The 300 year old insurance market projected 2003 profits on an annualized basis of $3.387 billion. On the old three-year system the 2003 underwriting year profit was estimated as around $3.186 billion.

Other highlights included:
— a further reduction in combined ratio to 90.7 percent (2002: 98.6 percent)
— a 66 percent increase in Lloyd’s Central Fund to $1.273 billion
— total Central Fund assets up 54 percent; now total $1.398 billion
— Net resources of Lloyd’s are up 50 percent to $18.2 billion

“Lloyd’s is in good shape after a year of strong progress. However, there is no room for complacency,” stated Lloyd’s Chairman Lord Levene. “We get daily reminders of just how risky our world is, and that is where Lloyd’s comes in. This market is founded on providing a shelter against worldwide risks.”

CEO Nick Prettejohn commented: “These results represent an encouraging underwriting performance and a further strengthening of the market’s balance sheet following last year’s return to profit. The 2003 result benefited from favorable external conditions, with strong premium rates and a low financial impact on the market of catastrophic loss.

“These results are good news for our U.S. customers and capital providers,” he continued. “We are proud to serve the U.S. market, which is critically important for Lloyd’s, and accounts for more than one third of our business.”

Prettejohn also pointed out that “Lloyd’s has outperformed our international peer group, as businesses in the market have concentrated on delivering underwriting profit. Lloyd’s Franchise Board took decisive steps in 2003 to strengthen the market, and we will continue that critical work. In particular, we will continue to take strong action where businesses are under-performing.”

Lloyd’s also discussed prior years results, which are calculated on the traditional three-year accounting basis. 2001, as expected, posted a huge loss $4.257 billion. “The latest projection from the businesses in the market for 2002 year-of-account is a profit of $2.991 billion, which is in line with previous projections,” said the announcement.

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