Lloyd’s of London group of insurers was hit by unprecedented losses in the first half of 2011, after a string of disasters meant customer claims were up by 24 per cent.
Lloyd’s reported a pre-tax loss of £697m in the six months to June, compared to a profit of £628m in the same period last year.
Outgoing chairman Lord Levene (pictured) said that 2011 had so far been “one of the most challenging years on record”, after the market suffered heavy losses related to the earthquakes in Japan and New Zealand, and flooding in Australia.
Between January and June customers of Lloyd’s 80-odd insurance syndicates made claims worth a total of £6.7bn, including £1.2bn solely on the earthquake and subsequent tsunami that hit Japan’s north coast in March.
Levene told City A.M. that despite the dramatic increase in claims, it was business as usual among the Lloyd’s market.
“We don’t hike prices and we’re not looking for more capital – we’ve got £57bn in assets. It’s the normal course of business for us,” he said.
Lloyd’s also joined Siemens yesterday in being the latest company to reduce its exposure to the Eurozone, pulling deposits from some peripheral European banks.
Twenty-eight per cent of its investment portfolio is in government debt, with the majority in the perceived safe havens of UK and US government securities.
“The knock-on effect [of global financial turmoil] is delayed and somewhat muted, “said Levene. “But clearly the way in which the world economy develops, if business levels fall, eventually it will run through to us.”