Central London insurance company reports record £2.3bn profit

Insurance company Lloyds of London is celebrating a record pre-tax profit of £2.3bn as it has announced its 2019 results.

The interim results - for the first six months of the year - hold some key standout figures. They include an aggregated market profit of £2.3bn, with net resources of £32.4bn (in December 2018, this figure was £28.2bn).

The Central London-based company’s pre-tax profits have been underpinned by a combined ratio of 98.8 per cent. The market has supposedly benefitted from unrealised gains due to reducing US and UK bond yields and returns from equities.

John Neal, Lloyd’s chief executive officer, said: “It is encouraging that the Lloyd’s market is showing increased discipline in 2019 as evidenced by a reduction in gross written premiums and an improvement in the loss ratio for the current underwriting year.

“However, we recognise the importance of continued focus on performance management to maintain this momentum throughout the rest of 2019 and beyond.

“At the same time as ensuring that our market can deliver sustainable, profitable growth, we need to make some brave choices on how to meet the expectations of our customers and all our stakeholders in the future.”

The quality of Lloyd’s balance sheet remains strong, with net resources growing to £32.4bn. In December 2018, this came in at £28.2bn, and the central solvency coverage ratio increasing to 266 per cent.

Lloyd’s operating expense ratio has seen a 1.2 per cent reduction in the period, from 39.3 per cent in 2018 to 38.1 per cent in 2019.

John concluded: “Lloyd’s has also not hesitated to put in place a robust set of actions to tackle unacceptable behaviour around the market and ensure that we set the tone for a culture that encourages the brightest minds to remain in and join our industry.

“The centrepiece of these actions is the Lloyd’s market-wide culture survey which has built the most comprehensive picture ever commissioned of the culture across the insurance industry.”

The survey’s results will be announced on September 24 at the Dive In Festival.