Lloyd’s of London to pay out £6.2bn
Lloyd’s of London confirmed a £0.9bn loss for 2020, which includes net incurred coronavirus losses amounting to £3.4bn after reinsurance recoveries.
Pay outs for Covid-19 will total £6.2bn on a gross basis according to a forecast by the insurance market, as claims due to Covid-19 will add 13.3% to the market’s combined ratio of 110.3%.
Over the last three years, Lloyd’s sustained performance improvement measures contributed to an improved underwriting result of £1.9bn and a 7.5% improvement in the combined ratio, excluding COVID-19, to 97.0%, compared to 104.5% in 2018.
Lloyd’s maintains strong capital and solvency positions, with net resources increasing to £33.9bn in 2020 and a central and market wide solvency ratios of 209% and 147% respectively.
John Neal, chief executive of Lloyd’s, commented on the impact of both the pandemic and Brexit on the insurance industry:
“Following an extremely challenging year marked by a global health crisis of a scale never seen before, Lloyd’s continued to support its customers with pay outs expected to total £6.2bn in COVID19 claims. The year was also marked by a high frequency of natural catastrophe claims and the UK’s formal exit from the EU, driving further losses and uncertainty.”
“Against this unprecedented backdrop we have made good progress across our performance, digitalisation, and culture transformation plans. Our disciplined underwriting approach and determination to become the world’s most advanced insurance marketplace have set us up for real success this year alongside the continued positive rate momentum that will see the market supporting growth for the first time in four years.”
Aside from losses due to the pandemic, the market delivered an underwriting profit of £0.8bn. The insurance marketplace recorded gross written premiums for the year of £35.5bn, down just slightly from £35.9bn in 2019.
Net resources increased by nearly 11 per cent to £33.9bn, demonstrating the strength of its balance sheet according to Lloyd’s, with a central solvency ratio of 209%.