The Lloyd’s market saw a slump in profits for the first six months of the year as heavy cat losses and a fall in investment returns blighted performance.
The market reported a pre-tax profit of £628 million lest then half the figure for the first six months of 2009 when the market delivered a figure of £1.32 billion.
While saying its combined ratio was a “a solid performance compared to our peers,” the figure of 98.7% is 6.9% higher then the previous year representing the impact of the wave of catastrophe losses which have defined the first half of the year.
Investment returns also fell from the 2009 figure of £708 million to£597 million.
In a statement Lloyd’s said the result “reflects a period of significant claims and extremely challenging investment conditions”.
It added; “A conservative investment mix has resulted in a positive return of £597 million during a period of continuing volatility in financial markets, and central assets are at a record high.”
Lloyd’s Chairman, Lord Peter Levene, said: “The first six months of 2010 were the costliest on record since we began interim reporting, testing not only Lloyd’s but insurers around the globe. While events such as the Chilean earthquake and the Deepwater Horizon loss have proved challenging, paying these claims and supporting our policy holders is what we are here to do. “It is a true indication of the strength of the Lloyd’s market that despite challenging investment conditions, softening rates and exceptional catastrophic events, we have returned a first half profit of £628 million.”
Lloyd’s Chief Executive, Richard Ward, added: “The first half of 2010 demonstrates that we are well placed to deal with challenging market conditions. Our resolute focus on underwriting discipline, close attention to our customers’ needs and a prudent approach to investment stands us in good stead for the second half of the year.”