Disaster insuranceLloyds of London's 2010 profit dropped 43 percent as a result of diasasters
The profits of Lloyd’s of London dropped by 43 percent last year as the insurance market took big losses from earthquakes in Chile and New Zealand and from BP’s oil rig spill in the Gulf of Mexico
Lloyd’s of London said Wednesday that its profit dropped by 43 percent last year as the insurance market took big losses from earthquakes in Chile and New Zealand and from BP’s oil rig spill in the Gulf of Mexico.
Lloyd’s said its full year pretax profit was ₤2.2 billion ($3.5 billion), down from ₤3.9 billion in 2009. Gross premium income rose 3 percent to ₤22.6 billion.
< p>The Washington Post reports that the market’s combined ratio — the measure of premiums against claims — was 93.3 percent, compared with 86.1 percent for 2009. Any measure below 100 percent indicates an underwriting profit, and a lower number indicates higher profitability.
Peter Levene, chairman of Lloyd’s, said 2011 looks like another difficult year because of unrest in the Middle East, floods in Australia, another earthquake in New Zealand, and the earthquake and tsunami in Japan.
It is too early to accurately gauge losses in Japan, but Levene said, “it is, of course, nothing compared to the human cost of the tragedy.”
Chief Executive Richard Ward said he was confident that Lloyds could cover its losses in Japan.
Lloyd’s said it expected to pay out between $300 million and $600 million in claims from the Deepwater Horizon oil rig disaster.
It estimates that claims from the Chilean earthquake in February will be ₤857 million, and it expects to pay ₤428 pounds for claims from the September quake in New Zealand.
The Post notes that the market benefited from a benign year of Atlantic windstorms. Although there were nineteen named tropical cyclones, the third-highest number in a century, the storms missed landing in the United States or hitting Gulf of Mexico energy fields.
