Lean premiums ebb earnings at Lloyd’s of London

Michael Bow
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Lloyd’s of London’s famous espresso building
Lloyd’s of London profits dipped slightly last year after gross premiums written at the iconic institution fell.

Pre-tax profits fell by £44m to £3.2bn for the year ending 2014, after premiums fell to £25.3bn from £25.6bn in the previous year.

Overall profitability measures at the group also weakened, rising to a combined ratio of 88.1 per cent from 86.8 per cent. A 100 per cent rate indicates the company has broke even.

“This is a strong set of results for Lloyd’s, despite challenging market conditions,” Lloyd’s of London boss Inga Beale said.

“The robust performance of the market in 2014 reflects a collective achievement, of which we should be proud.”

The 320-year-old outfit, well known for its iconic Richard Rogers-designed building which has been compared to an espresso machine, last year made history by appointing Beale as its first female chief executive.

Despite a spate of disasters last year, the company said global catastrophes were below the long-run average, helping it maintain steady profits.

“Had aggregate catastrophe claims been more in line with the longer-term average, Lloyd’s accident year result could have moved into overall loss,” the firm said in its annual report.

The group’s return on capital also dropped to 14.7 per cent, down from 16.2 per cent.

“This is another excellent set of results for the Lloyd’s market, achieved against a backdrop of low interest rates and softening premium rates,” Lloyd’s chairman John Nelson said.

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