While global headlines were dominated by “$2.8 billion loss”, “first loss in six years”, “Beale takes pay cut”, Lloyd’s underwriters in Canada have been giving themselves a quiet pat on the back.
They posted strong 2017 financial results and achieved a net written premium growth of 6%, highlighting Canada as a “key” piece in the Lloyd’s market growth strategy.
A Lloyd’s spokeswoman told Insurance Business: “Lloyd’s underwriters in Canada posted strong year-end financial results with a solid net written premium increase of 6%, supported through strong primary insurance growth. Profitability returned to historical norms with underwriting income of $425 million.
“Lloyd’s continues to increase its market share in specialty commercial lines business and Canada will remain key to the Lloyd’s market overall growth strategy.”
Successes in Canada have been overshadowed somewhat by the market’s revelation on Wednesday that it had posted its first loss in six years after an “exceptionally difficult year” of catastrophes.
Lloyd’s said the frequency and scale of the disasters in the second half of 2017 saw major claims cost the market £4.5 billion (around C$8.2 billion), which is more than double the £2.1 billion (C$3.8 billion) figure for 2016. This resulted in an underwriting loss of £3.4 billion (C$6.2 billion).
Despite the difficult circumstances, the Lloyd’s market worked hard to pay claims to policyholders as quickly as possible throughout 2017. It paid out a total of $23.6 billion (CA$30.5 billion) in claims gross of reinsurance, helping countless businesses, communities and countries recover quickly after disasters.
“The market experienced an exceptionally difficult year in 2017, driven by challenging market conditions and a significant impact from natural catastrophes. These factors mean that for the first time in six years Lloyd’s is reporting a loss,” CEO Inga Beale commented after the results were announced.
“Lloyd’s is here to support customers when it matters most, providing the financial support to enable businesses, governments, and, most importantly, people, to recover and rebuild their lives as quickly as possible and I’m proud of the market’s response.”
Overall, Lloyd’s resources remain strong at $37.2 billion (CA$48.1 billion), according to a release. Its rating with the leading ratings agencies remain at A (excellent) from A.M. Best, A+ (strong) from Standard & Poor’s and AA- (very strong) from Fitch.
