Lloyd’s have provided a summary of their Results and Financial Highlights for Analysts in March 2018.
A high level overview is that 2017 has been a difficult year in which Lloyd’s have seen their Combined Operating Ratio slip from 97.90% in 2016 to 114.0%.
Drivers to this have been the continuing downwards pricing trends and exposure to the large catastrophe losses of 2017. Lloyd’s exposure to these catastrophe losses at this stage is estimated to be US$6B.
Lloyd’s average annual losses in this large loss sector during the preceding last 15 years has been just over US$2B. Whilst clearly impactful in 2017, Lloyd’s Combined Operating Ratio assessment of all of the business classes shows all of them to be running in excess of 100%.
The above said, Lloyd’s Central Fund has benefited from good investment returns and Lloyd’s retains healthy net resources after seeing growth of their Central assets by 4% from 2016 to 2017.
With Aviation Loss Ratio’s above 100%, we can expect insurers to impose premium increases into the future.