Lloyd’s announced a pre-tax profit of £3.846 billion ($7.622 billion) for 2007, compared to £3.662 billion ($7.26 billion) in 2006. Gross written premiums were down slightly at £16.366 billion ($32.346 billion) from £16.414 billion ($32.454 billion) in 2006.
The bulletin also gave the following Financial highlights:
— Combined ratio of 84.0 percent (2006: 83.1 percent) compares favorably with an estimated average of 93.8 percent for US property and casualty insurers 94.7 percent for US reinsurers 96.0 percent for European insurers and reinsurers and, 85.1 percent for Bermudan insurers and reinsurers [citations];
— 34 percent increase in central assets to £1.951 billion [$3.867 billion] (2006: £1.454 billion ($2.88 billion]);
— investment return up 21 percent to £2.007 billion [$3.978 billion] (2006: £1.661billion [$3.292 billion]); and
— release of surplus reserves of £856 million [$1.696 billion] (2006: £270 million [$535 million]).
Lloyd’s, Chairman Lord Levene commented: “2007 was another profitable year for Lloyd’s with the market reporting a £3.8 billion profit and continuing to outperform its major international peers. Lloyd’s benefited from a limited exposure to catastrophes but this has resulted in increased pressure on rates across all lines of business. The need to exercise underwriting discipline and maintain a focus on underwriting for profit rather than market share remains essential.”
Chief Executive Richard Ward added: “Lloyd’s is in good shape to meet the challenges that face us but we cannot expect the strong underwriting conditions and low levels of catastrophes to continue. Last year’s softening market conditions reinforced, once again, the need for a clear strategy to enable the market to maintain discipline and strength in the face of increasing competition. As a marketplace we have a responsibility to our policyholders and to ourselves to ensure that we maintain our financial strength and security throughout the course of a cycle.”
The report indicated the 44 percent of Lloyd’s business came from the U.S. and Canada, with 24 percent from the UK, 14 percent from Europe and 7 percent from Asia/Pacific and South America.
Combined property and casualty revenues accounted for 44 percent of Lloyd’s business, while reinsurance added 33 percent. Marine coverage was 8 percent, while energy and auto each contributed 6 percent.
The complete Lloyd’s 2007 Annual Report can be accessed at: www.lloyds.com/2007results; An interview with Richard Ward discussing the results may be obtained on the Lloyd’s web site at: www.lloyds.com.
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