Today has certainly been historic with the Brexit repeal bill revealed – but it has also been highly notable for the insurance sector too, thanks to Lloyd’s of London.
The company has already revealed its plans to set up a European base in Brussels and today it has additionally announced its earnings results – suggesting it will head to the continent with full pockets after reporting a £2.1 billion profit during 2016.
The world’s largest specialist market for insurance and reinsurance did not have it all its own way, however, even though the result was its fifth highest since the turn of the century. Its underwriting ratio climbed steeply – standing at 97.9% compared to 90.0% one year earlier.
In a release the company outlined that its lower underwriting result was offset by investment returns and a downward yield shift in the bond markets, as well as foreign exchange gains thanks to the depreciation of sterling.
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“This has been a year of challenge for the insurance sector with premiums once more under continued downward pressure. It is vital that the corporation does everything it can to support the market and make the platform attractive, while demonstrating value for money,” commented chief executive Inga Beale.
“Our collective focus must be on providing customers with the products they want, embracing innovation and modernisation. The market has shown how well it reacts to the demands of its customers in a rapidly changing risk environment with the considerable increase in cyber coverage throughout 2016 a perfect case in point. It is critical throughout 2017 we continue to demonstrate that Lloyd’s is the home for creativity and expertise.”
Meanwhile outgoing chairman John Nelson outlined that the company needs to have a clear focus on improving its underwriting performance going forward.
“The results confirm that we must have an unrelenting focus on underwriting discipline through 2017,” he stated. “The challenge for all of us is to reduce the cost of conducting business because within the market this is impacting on already thin underwriting margins.”
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