The Lloyd’s of London insurance market has slumped to a £438m ($568m) pre-tax loss in the first half of this year mainly due to the impact of claims related to the coronavirus pandemic.
However, the 300-year-old market’s marine business lines appear to have withstood a slump in seaborne trade to contribute to a return to profitability in the transportation sector over the last six months.
According to Lloyd’s figures, its overall six-month loss this year marks a considerable turnaround from the £2.3bn pre-tax profit it reported in the same period last year.
Gross premium increased slightly from £19.6bn in the first half of 2019 to £20bn in the first half of 2020.
Chief executive John Neal said Lloyd’s would have made a sizeable underwriting profit were it not for £2.4bn worth of Covid-19 related claims. He said the profit drive at Lloyd’s had made “excellent progress” in the first half of the year.
One indication of improved underwriting performance is a turnaround in profits in its marine business.
The marine, aviation and transport sector made a £10m underwriting profit compared to a loss of £113m in the same period last year.
Premium income in the sector also increased despite reduced seaborne transportation revenue, which makes up close to half of marine premium. In the first half of 2020 Lloyd’s marine, aviation and transport sector earned gross written premium was £1.5bn, compared to £1.4bn in the same period in the previous year.
As reported TradeWinds's Spotlight on Marine Risk business report this week, marine underwriters have been encouraged to seek higher premiums as the wider general insurance market suffers from Covid-19 related claims.
