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Disasters push Lloyd's of London to £2bn annual loss
Lloyd's of London reported its first annual loss in six years after the insurance market was battered by hurricanes, earthquakes and other disasters in what it said was an exceptionally difficult year.
Lloyd's swung to a pre-tax loss of £2bn in 2017 from a £2.1bn profit a year earlier as major claims more than doubled to £4.5bn from £2.1bn.
The surge in claims sent Lloyd's combined ratio, which measures claims and costs as a proportion of premiums, to 114% from 98%. Investment returns improved to £1.8bn from £1.3bn.
Insurers racked up a record $135bn of losses from natural disasters in 2017 as hurricanes hit the Caribbean, earthquakes rocked Mexico and wildfires blazed in California. Publicly traded Lloyd's underwriters Beazley and Hiscox have already reported tumbling annual profits.
Lloyd's Chief Executive, Inga Beale, said: "The market experienced an exceptionally difficult year in 2017, driven by challenging market conditions and a significant impact from natural catastrophes. These factors mean that for the first time in six years Lloyd's is reporting a loss."
With another difficult year in prospect, Beale said Lloyd's needed to cut costs and become easier to do business with. The market, which cut jobs in 2017, will require its member firms to process more transactions electronically.
Beale said: "Lloyd's will be mandating the use of electronic placement on a phased basis over time. Unless the market moves together it will not reap the benefits and reduce administration costs."