(London – Insurance News 360) – On March 27, Lloyd’s released the 2018 annual report, which announced an aggregated market loss of 1.0bn for 2018, which is half of what the aggregated market loss was in 2017.
Other key figures to note are:
- An increase of £1.9bn in gross written premiums in 2018 (£35.5bn in 2018, compared to £33.6bn in 2017)
- A reduction of net incurred claims in 2018: £16.4bn compared to £18.3bn in 2017
- A reduction of net investment return in 2018: £0.5bn compared to 1.8bn in 2017
Several natural disasters in 2018, including Hurricane Florence and Hurricane Michael, Typhoon Jebi in Japan and California’s wildfires led to major claims that cost the Lloyd’s market £2.9bn. This is significantly higher than the long term average of £1.9bn. This contributed to a combined ratio of 104.5% in 2018.
In spite of substantial claims, Lloyd’s is in a stronger financial position. The company added 9% to its total assets, bringing that figure to £118.0bn. Lloyd’s net resources increased to £28.2bn. Lloyd’s central assets also saw growth to £3.2bn.
A rigorous business planning process for 2019 removed almost £3.0bn of poorly performing business from the market and remediation plans were implemented across all review classes of business. Four new syndicates started trading in 2018 demonstrating Lloyd’s enduring appeal and the market’s continuous focus on innovation.
Lloyd’s is also ready for Brexit through its new Brussels subsidiary, which is fully operational and writing risks. This provides certainty for our customers in the European Economic Area (EEA) that they can continue to access Lloyd’s insurance products, services and expertise. The market also made good progress on modernization in 2018, evidenced by a substantial increase in adoption of technology solutions, including electronic placement.
“The market’s aggregated 2018 results report a combined ratio of 104.5%, and a £1.0bn loss. This performance is not of the standard that we would expect of a market that has both the heritage and quality of Lloyd’s. We have implemented stronger performance management measures which will remain an enduring feature of how we go about our business. We expect these actions to deliver progressive performance improvement across the market beginning in 2019 and in the years to come,” said John Neal, Lloyd’s Chief Executive Officer. “We are determined to show decisive leadership across three fronts: to address the performance gap; to secure Lloyd’s future success; and, following our announcement yesterday, to tackle all forms of inappropriate behavior with robust actions to create a more inclusive working environment.”