SPECIALIST insurance market Lloyd's of London has posted a return to profit after benefiting from a "benign" six months for natural catastrophes.
The surplus of £1.5bn is in sharp contrast to a year ago, when Lloyd’s recorded an interim loss of £697m in what turned out to be the second most expensive year on record for the insurance industry.
The market, which is made up of 88 underwriting syndicates, saw £12.9bn of claims in 2011, including £4.6bn related to disasters such as floods in Australia and Thailand, an earthquake in New Zealand and the tsunami in Japan.
The profit was the strongest in five years and came despite continuing low premium rates and challenging investment conditions.
Chief executive Richard Ward said: “This is a welcome return to profit for the market, after a six-month period that could not be in greater contrast to the first half of 2011.”
Lloyd’s incurred claims of £4.5bn, a fall of nearly a third on those the market experienced in the first half of 2011, while its return from investments rose 13% to £619m despite low interest rates.
The Lloyd’s market has shown in recent years that it is more than able to cope with major catastrophes and met its own claims in 2011 without any call on its central fund ... its fund of last resort.
The most expensive event to rock the insurer was Hurricane Katrina in 2005, which caused claims worth £2.4bn.
Lloyd’s recently unveiled Vision 2025, which sets out plans to grow the business in faster growing markets and to make London the “global hub“ for specialist insurance by 2025.
Among changes to modernise the market, Lloyd’s introduced a new franchise structure and phased out the number of Names who backed the market with an unlimited liability.