Lloyd’s Post Healthy Half-Term Profits

by Stewart Douglas

Story link: Lloyd’s Post Healthy Half-Term Profits

Lloyd’s has today announced healthy interim profit figures gross of tax, topping £1.8 billion for the first half of the year 2007 to the end of June, largely as a result of favourable market conditions.

The figures released today far surpass the earnings of the same period last year, which saw it realise interim profit figures of £1.35 billion compared to the figures thus far for 2007, which have been deemed to be resultant from favourable trading conditions of late.

A weaker underwriting operation was offset against a beneficial rating environment and the freeing of previous claim reserves which had been restricted prior, resulting in the stronger profit figures for the first two quarters.

However, the results have not been taken lightly by Lloyd’s, and were followed with a warning that the operation would face ongoing challenges over the coming months through the third and final quarter results through probability and as a result of a prolonged run of good fortune, in addition to tightening global market conditions.

Chief Executive Richard Ward suggested that Lloyd’s had seen an unusually long period in which no claims of catastrophic scale have been raised, as well as a better than average rating climate. In effect, he was quick to suggest that there may still be problems over the course of the year, as is the nature of the insurance sector, which could see Lloyd’s more heavily hit.

Lloyd’s also saw its central assets holdings increase from £1,454 million last year to £2,165 million by the end of the first half this year to round off what has been a positive period of growth and development for the business.

Analysts are expecting that Lloyds will continue to outperform on last years figures, failing any unusually large size claims or losses.