Lloyd’s profits for 2004 hit GBP1.36 billion

Lloyd’s of London says pre-tax profits for the 2004 year of account will be GBP1.36 billion, despite net claims of GBP1.2 billion from the U.S. hurricanes. 2004 does represent a decline from 2003, when the London market recorded GBP1.89 billion in pre-tax profits.Overall, the market posted a combined ratio of 96.9% in 2004, up from 90.7% in 2003. Hard-hit were U.S. reinsurers who posted a 106.1% combined ratio last year, compared to their U.S. primary market counterparts who brought in a ratio of 98.7%. European insurers and reinsurers posted a 98.2% ratio last year.The financial strength of the market increased last year, with overall resources of the Society of Lloyd’s and its members up 20% to GBP12.17 billion, and central assets up 52% to GBP1.18 billion, partly the result of the successful GBP500 million subordinated debt issue.”These results, achieved despite significant losses from natural catastrophes, are testimony to the continually improving quality and strength of the Lloyd’s market,” says Lloyd’s chairman Lord Peter Levene. “A few years ago, such a performance would have been unthinkable.”Lloyd’s CEO Nick Prettejohn adds: “”Lloyd’s performance compared well with our global competitors. However, we must remain vigilant if we are to continue to deliver a strong underwriting performance. Market conditions remain profitable but increasingly competitive in a number of lines.” He says the market will be focused on improved efficiency and the quality of business it writes, rather than volume.