Lloyd’s profit jumps 152% in 2003

The Lloyd’s market is projecting overall profit of US$3.2 billion for 2003, up 152% over 2002’s result of US$1.3 billion.The market will also reduce its combined ratio by eight points, to 90.7% last year against 98.6% the year prior. At the same time, the market’s “central fund” was boosted 66% in 2003 to US$1.3 billion.Strong premium conditions and low catastrophic losses last year helped produce this performance, says Lloyd’s CEO Nick Prettejohn. He also credits the new franchise system with keeping a tight rein on under-performing members of the market.”Lloyd’s made good progress in 2003, in absolute and competitive terms,” he says. “The task now is to build on that progress. Consistently good performance, balance sheet strength and attractive returns for capital providers can only be achieved if businesses continue to write for profit and price risk adequately.”Reserve additions and capital markets still not at peak performance continue to force the industry to focus on underwriting profits, he adds. As well, insurers continue to be challenged by the emergence of risk globally.It should be noted the US$1.3 billion figure for 2002 was the initial projection, with Lloyd’s now projecting a profit of US$3.0 billion. This is the result of the transition now taking place between Lloyd’s previous three-year accounting system and the new annual accounting system beginning in 2003. Lloyd’s also updated its 2001 projection to a loss of US$4.3 billion, which includes 9/11 losses.