Lloyd's today announced a return to profit of £2.5bn (pre-tax) for 2019, representing an improvement of £3.5bn on the previous year (2018: a loss of £1.0bn) and an 8.8% return on capital (2018: (3.7%)).
The key figures reported in Lloyd's 2019 Annual Report are:
§ Net resources of £30.6bn (2018: £28.2bn)
§ Central solvency and coverage ratio of 238% (2018: 249%; 19 March 2020: 205%)
§ Gross claims paid of £23.0bn (2018: £19.7bn)
§ Gross written premiums of £35.9bn (2018: £35.5bn)
§ Combined ratio of 102.1% (2018: 104.5%)
§ Aggregated market profit of £2.5bn (2018: loss of £1.0bn)
Lloyd's return to profitability in 2019 is underpinned by strong performance across investments (2019: 4.8% return; 2018: 0.7% return), alongside sustained rate increases and improving underwriting discipline. Lloyd's combined ratio saw an improvement of 2.4 percentage points to 102.1% (2018: 104.5%), with the underlying 2019 accident year ratio improving to 96.0% (2018: 96.8%), exclusive of major claims. These encouraging developments show Lloyd's performance agenda is beginning to drive better underwriting discipline in the Lloyd's market.
Gross written premiums (GWP) for the period totalled £35.9bn, marginally up from £35.5bn in 2018. This equates to a reduction in GWP of 2.6% after eliminating positive foreign exchange rate movements and is underpinned by a risk adjusted rate increase of 5.4%, indicating continued underwriting discipline across the market.
Lloyd's has today confirmed that the market is in a strong position to respond to the impacts of COVID-19 and support its customers and business partners, following the publication of its 2019 annual results. In 2019, Lloyd's net resources increased by 8.6% to £30.6bn, reflecting an exceptionally strong balance sheet and a central solvency ratio of 238%.
Although there has been a high degree of turbulence in the financial
markets over recent weeks, as at 19 March Lloyd's solvency ratio stood
at 205%. The exceptional strength of the market's balance sheet has been
further bolstered by Lloyd's return to a profit of £2.5bn (2018: loss
of £1.0bn) in 2019, driven by the repair in investment markets in the
first half of 2019. Please see attached pdf for full release and preliminary results.
John Neal, Lloyd's CEO, said:
"Whilst we are pleased to be announcing Lloyd's return to profitability in 2019 and continued progress across our priorities, our primary focus right now is on supporting our customers and business partners in their time of need. I am confident in Lloyd's ability to meet the challenges before it, and in doing so demonstrate the market's unrivalled ability to support people, businesses and countries around the world in response to the far-reaching impacts of COVID-19.
As we focus on supporting our business partners and customers during this time, it has also never been more important to accelerate progress on our ambition to create the most advanced insurance marketplace through the Future at Lloyd's. We have sharpened our focus for 2020, prioritising initiatives that will ensure around 80% of Lloyd's business is digitally supported, together with fast-tracking claims processing improvements and building the foundational data and technology infrastructure to support Lloyd's future ecosystem."
Bruce Carnegie-Brown, Lloyd's Chairman, added:
"The beginning of 2020 has proved exceptionally difficult as COVID-19 spreads rapidly around the world with devastating consequences for families, communities and the global economy. Now more than ever, our customers need us to be ready to support them through these challenging times.
At Lloyd's, we are laying the foundations to do this more effectively. By focusing on performance management, modernising the market and creating a market culture that will attract the best and brightest talent, we are making the market more resilient, more successful and better placed to meet our customers' needs."
We will publish further information on the Lloyd's results during the day.