Lloyd’s sees profits slip on returns

The Lloyd’s of London insurance market posted a slide in interim profits to £1.38 billion yesterday after falling bond prices hit investment returns.

That compared with a profit of £1.53bn in the first six months of 2012, as Lloyd’s investment returns fell to £247 million from £619m amid what it said remained a “testing economic backcloth”.

Gross written premiums rose 4.9 per cent to £15.5bn. Despite a benign first half of the year for natural catastrophes, with no major claims for the Lloyd’s market, total net claims were £4.85bn.

Chairman John Nelson said: “This is a good result for the Lloyd’s market, although the volatility of the insurance business means that we must remain cautious about how the full year result will turn out.”

The combined ratio, a measure of profitability showing what percentage of premiums are paid out in claims and expenses, improved to 86.9 per cent from 88.7 per cent in 2012.