Lloyd’s 2015 first-half profit of 1.19 billion compares to 1.65 billion in 2014 H1

Expert underwriting and rigorous oversight has helped Lloyd’s achieve pre-tax profit of £1.19 billion during the first half of 2015, although the figure is down from “exceptional high” of £1.65 billion for the first six months of 2014.

At June 30, 2015, foreign exchange rates were £1 = US$1.57, notes a statement Thursday from the specialist market for insurance and reinsurance.

Lloyd’s reports that the solid numbers have been achieved despite pressure on pricing as a result of an intensely competitive environment, economic volatility and the impact of low interest rates on investment returns. “These results demonstrate Lloyd’s success and resilience despite challenging underwriting and investment conditions,” chief executive Inga Beale says in the statement.

For the half-year ending June 30, 2015, Lloyd’s witnessed gross premiums of £15.51 billion, up from £14.48 billion for 2014 H1 (and £15.49 billion for 2013 H1); net earned premium of £10.04 billion, up from £9.51 billion for 2014 H1 (and £9.59 billion for 2013 H1); investment return of £339 million, down from £647 million in 2014 H1 (and £247 million in 2013 H1); an underwriting result of £1.05 billion, down from £1.20 billion in 2014 H1 (and £1.26 billion in 2013 H1); and a combined ratio of 89.5% compared to 87.4% (and 86.9% in 2013 H1).

“The combined ratio shows Lloyd’s outperforming its competitors for the fourth consecutive year and reflects the results of the market’s 96 syndicates,” the statement notes. Slides detailing Lloyd’s 2015 interim results show that first-half combined ratios for 2011 was 113.3%, 88.7% for 2012, 86.9% for 2013, 87.4% for 2014 and 89.5% for 2015.

With regard to net earned premium (NEP), Lloyd’s reports that on a calendar year basis, all classes experienced continued prior-year releases. The NEP for Reinsurance is £3.3 billion; £2.5 billion for Property; £2.1 billion for Casualty; £0.9 billion for Marine; £0.5 billion for Energy; £0.5 billion for Motor; and £0.2 billion for Aviation. [click image below to enlarge]

“Our modernization strategy and our innovative approach ensures that Lloyd’s continues to play a vibrant role as the world’s leading specialist insurance and reinsurance market,” Beale says in the statement.

“Although there is little doubt that challenging times lie ahead, Lloyd’s is in a robust financial position, well-capitalized and well-reserved to face the future,” notes Lloyd’s chairman John Nelson. “With an expanding international footprint across Asia, Latin America and the Middle East, Lloyd’s influence and relevance as a global force for effective risk management has never been stronger.”