Lloyd’s of London said it expected 2020 payouts for insurance claims related to the Covid-19 pandemic to hit £6.2bn as it reported pre-tax net losses of £0.9bn in an “extremely challenging year”.
The 335-year-old insurance market also cited natural catastrophe claims and Brexit for the crash in earnings. In 2019 it reported pre-tax profits of £2.5bn.
After taking into account reinsurance policies, the net cost of Covid-19 for the market was £3.4bn, while the pandemic added 13 percentage points to its combined ratio, a measure of claims payouts and other costs versus premiums paid by customers, pushing it to 110%.
Sales fell, with gross written premiums down £400m to £35.5bn. Net resources, which would be used to cover claims grew to £34bn from £30.6bn.
