Lloyd’s reports 34% increase in profit

Lloyds has reported a pre-tax profit of 1.8 billion [approximately Cdn$3.65 billion], for the first six months of 2007, marking a 34% increase over last year.Lloyds saw a profit of 1.35 billion [approximately Cdn$2.74 billion] for the same period of 2006.The insurer also reported a combined ratio of 82.9% for the first half of 2007, compared to 86.0% for the same period in 2006).A Lloyds release contrasts this ratio with an estimated average of 93% for U.S. property and casualty insurers, 90% for U.S. reinsurers, 86% for Bermuda, and 97% for European insurers and reinsurers. This result was driven by the favourable rating environment in 2006, together with the release of prior claims reserves, a Lloyds statement says.This was balanced by the weaker, but still profitable, underwriting conditions experienced in the first half of the year.These profits reflect the recent favourable rating environment and a relatively low level of catastrophe claims, Richard Ward, Lloyds chief executive, said in a statement.We are now seeing a downward pressure on rates and a softening of conditions across all classes. This reinforces the continued need to focus on underwriting for profit, he added.