Lloyd’s reduces risk exposure

by Gill Montia

Story link: Lloyd’s reduces risk exposure

Lloyd’s of London has reduced forecasts for the amount of risk its syndicates plan to underwrite during 2008, because of falling premiums.

In an annual update, the world’s oldest insurer reported that it plans to underwrite £15.95 billion of insurance risks this year, compared with £16.1 billion in 2007.

The news comes despite the establishment of nine new syndicates and two managing agents during the past 12 months, although the number of individual Lloyd’s Names has fallen almost a fifth in recent times, to 907. (Collectively, the Names are prepared to underwrite £921 million of risks.)

Insurance experts estimate that premium rates for aviation and catastrophe insurance have decreased by between 5% and 20%.

As a result, some brokers and underwriters are reducing exposure to, or withdrawing from, some areas seen as unprofitable.

Last year, Amlin announced that it would be reducing the amount of aviation insurance it wrote because it considered global premiums were too low to sustain the industry in the event of a single major aircraft disaster.

This year’s publication of annual capacity numbers is the last to be published by Lloyd’s. In future it will fall in line with the wider insurance market by reporting gross written premiums.