Aon Benfield Analytics’ Market Analysis team today launches its latest Lloyd’s Update report, covering the market’s 2011 financial results and business position in 2012.
• Lloyd’s reported a pre-tax deficit of GBP516 million for 2011, driven by record major losses and low investment returns. Over the last five years, pre-tax profits total GBP11.3 billion and the overall return on capital employed stands at 14.3%.
• At GBP4.6 billion (USD7.4 billion), major losses were more than double the prior year level and more than three times the long-term average. They represented 25.5% of net premium earned and 24.1% of opening net resources (both lower than in 2001 or 2005).
• The accident year underwriting result moved from a small profit in 2010 to a loss of GBP2.2 billion in 2011, equating to a combined ratio of 113.3%. Prior year reserve releases rose by 15% to GBP1.2 billion, reducing the combined ratio to 106.8% on a calendar year basis.
• Lloyd’s overall investment return fell by 24% to GBP955 million, reflecting the continuing low interest rate environment; the yield on average invested assets fell from 2.6% to 1.9%.
• Direct exposure to ‘peripheral’ eurozone sovereign debt is described as negligible. Indirect exposure via corporate bonds issued by the banking sector has been stress-tested.
• Despite the unprecedented major loss burden in 2011, members’ Funds at Lloyd’s, the market’s central assets and overall solvency coverage remain at record levels.
Please click here to view the report:
http://thoughtleadership.aonbenfield.com/documents/120625_marketanalysis_lloyds_update_fy2011.pdf
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