Specialist insurance market Lloyd’s of London posted a return to profit yesterday after benefiting from a “benign” six months for natural catastrophes.
The surplus of £1.5bn is in sharp contrast to a year ago, when Lloyd’s recorded an interim loss of £697m in what turned out to be the second most expensive year on record for the insurance industry.
The market, which is made up of 88 underwriting syndicates, saw £12.9bn of claims in 2011, including £4.6bn related to disasters such as floods in Australia and Thailand, an earthquake in New Zealand and the tsunami in Japan.
The profit result was the strongest in five years and came despite continuing low premium rates and challenging investment conditions.
Chief executive Richard Ward said: “This is a welcome return to profit for the market, after a six-month period that could not be in greater contrast to the first half of 2011.”
Lloyd’s incurred claims of £4.5bn, a fall of nearly a third on those the market experienced in the first half of 2011, while its return from investments rose 13 per cent to £619m despite low interest rates.
The Lloyd’s market has shown in recent years that it is more than able to cope with major catastrophes and the company met its own claims in 2011 without any call on its central fund – its fund of last resort.
The most expensive event to rock the insurer was Hurricane Katrina in 2005, which caused claims worth 4.3 billion US dollars (£2.4bn).