Lloyd’s of London, the world’s biggest insurance market, returned to profit in the first six months of the year on the back of higher premiums as insurers started to claw back cash from the Covid pandemic.
The company on Thursday recorded a pre-tax profit of £1.4bn in the half-year to June 30 against a loss of £400m a year earlier driven by a strong underwriting performance. However, insured losses related to US Hurricane Ida were not included in the numbers.
Lloyds’ underwriting profit was £1bn and gross written premiums across the market increased to £20.5bn, up from £20bn in the first half of last year. Premium rates rose 9.9%, while the combined ratio came in at 92.2%, compared with 110.4% a year earlier. A level below 100% indicates an underwriting profit.
It paid out £2.2bn for Covid-19 losses, a slight fall on the £2.4bn in the first half of 2019. For customers affected by the pandemic, 80% of claims filed have been paid so far.
Many insurers suffered last year due to hefty pandemic-linked claims for incidents like cancelled events. But, after writing exclusions into contracts for the pandemic and raising premiums, have rebounded this year.
“Lloyd’s has successfully repositioned the market for sustainable, profitable growth,” said chief executive John Neal said in the statement.
The group paid out £9.4bn in claims during the first half of this year, relating to supply chain disruptions such as the Suez Canal blockage, the ice storms in Texas, summer flooding in Germany and the Netherlands, and recent wildfires in Europe.
“We are making great strides on all our strategic priorities which focus on improving the culture in the market, the Future at Lloyd’s digital transformation, and sustainability, climate and inclusion.”