Insurance market Lloyd’s swings back to profit

It is a change from the £438,000 million that the company lost a year earlier.

Lloyd’s is cutting operating costs through a digitalisation programme. (Ian West/PA) (PA Wire)

The world’s biggest insurance market has swung back into a profit after seeing a boost in its underwriting business.

Lloyd’s of London said that profit before tax reached £1.4 billion in the first six months of 2021.

It is a change from the £438,000 million that the company lost a year earlier.

The standout change came from the company’s underwriting business.

It swung from a £1.3 billion loss in the first six months of last year to a £1 billion profit.

The marketplace’s insurers paid out £9.4 billion in claims to its customers.

They have paid out 80% of the Covid-19 related claims notified so far.

Lloyd’s chief executive John Neal said: “In an uncertain world Lloyd’s remains acutely focused on supporting our customers when they need us, and in the first half of 2021 we have paid out nearly £10 billion in claims to help the recovery of businesses and economies globally.

“Against this backdrop, Lloyd’s has successfully repositioned the market for sustainable, profitable growth as evidenced in this strong set of financial results.

“I am encouraged to see that market performance has improved as a result of our ongoing remediation efforts.

“This, as well as our exceptionally strong balance sheet, brings Lloyd’s performance in line with our global peer group.

“Alongside performance, 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 which underpin our purpose.”

A central part of this digital transformation is cutting operating expenses.

The company’s gross written premiums rose to £20.5 billion from £20 billion because of an increase in premium rates for the 15th quarter in a row.

Premium rates rose by 9.9%.

Gross written premiums increased to £20.5bn (HY 2020: £20.0bn) due to an increase in premium rates, high customer retention and new growth for the first time in four years.