Inga Beale, chief executive officer of Lloyds of London, right, speaks during a Bloomberg Television interview. Photograph: Simon Dawson/Bloomberg
The Lloyd’s of London insurance market posted unchanged profits for 2014 and a lower return on capital, pressured by increasing competition.
Ninety-four syndicates underwrite insurance at Lloyd’s, housed in one of the most recognisable buildings in London’s main financial district, with listed companies including Catlin , Hiscox and Amlin.
Lloyd’s of London posted a pre-tax profit of £3.2 billion for 2014, it said on Thursday, unchanged from the previous year.
Its return on capital dropped to 14.7 per cent from 16.2 per cent.
Insurance underwriters tend to perform less well in the absence of major catastrophes, as insurance premiums fall.
New players such as hedge funds in the reinsurance sector, which helps insurers pay large damage claims in exchange for part of the premium, have also made the sector increasingly competitive.
“This is a strong set of results for Lloyd’s, despite challenging market conditions,” chiefeExecutive Inga Beale said. “The robust performance of the market in 2014 reflects a collective achievement of which we should be proud.”
Lloyd’s of London is looking to develop business in emerging markets, where industry specialists also said there is rising competition. It opened operations in Dubai and China this month.
The market’s combined ratio, a measure of profitability showing how much of insurance premiums are paid out in claims and expenses, weakened.
The ratio - for which a level below 100 per cent indicates a profit - rose to 88.1 percent from 86.8 per cent in 2013.
Gross written premiums dropped to £25.3 billion in 2014 from £25.6 billion the previous year.
Reuters
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