Profits at the Lloyd’s of London insurance market tumbled by 28 per cent in the first half amid “intensely” competitive trading conditions.
The firm also said that economic volatility and the low interest rate environment were impacting investment returns, which more than halved to 0.6 per cent, down from 1.3 per cent a year earlier.
For the six months to the end of June, Lloyd’s posted a pre-tax profit of £1.19 billion, compared with £1.65bn a year ago, but its combined ratio – a key measure of profitability showing what proportion of insurance premiums are paid out in claims – improved by more than two percentage points to 89.5 per cent.
Inga Beale, who became chief executive at the start of last year, said the results had been delivered in the face of a “difficult” environment that has seen low interest rates reduce investment returns and increase competition on insurance premiums around the world.
She added: “This sizeable profit is in large part due to the market’s expert underwriting and our deep commitment to rigorous oversight. Our modernisation strategy and our innovative approach ensures that Lloyd’s continues to play a vibrant role as the world’s leading specialist insurance and reinsurance market.”
More than 90 syndicates underwrite insurance at Lloyd’s, housed in a building designed by Richard Rogers that is one of the most distinctive in London’s financial district. It takes its name from a coffee shop that was a hub for shipping information.