The world’s insurance market is finally in the black after two years of losses. Lloyd’s of London saw a significant jump in first-half profits, thanks to strong investment markets and the actions it has taken to cut out businesses that were dragging down its results.
The H1 numbers revealed that Lloyd’s pre-tax profits were £2.3 billion (around US$2.9 billion), up from £600 million (around US$748 million) in the same period last year. An improvement in investment returns on a portfolio of bonds that Lloyd’s holds to back the insurance policies that are sold were the main reason for the leap. The insurance market had suffered back-to-back full-year losses over the last two years.
Income from the sale of insurance policies decreased 3% as Lloyd’s directed insurers in the market to move away from the worst-performing 10% of their businesses, and gross written premiums climbed 1.7% to £19.7 billion (around US$25 million). Nonetheless, the combined ratio didn’t fare as well, worsening from 95.5% to 98.8%.
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