UK insurers’ profits soar as claims decline

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London - Lloyd’s of London, the oldest insurance market, reported its biggest annual profit in four years yesterday as natural catastrophe claims declined.

Pretax profit increased to £3.2 billion (R57bn) last year from £2.8bn the previous year, the London-based market said in a statement yesterday.

Lloyd’s paid out 86.8p in claims and operating expenses for every pound it took in in premiums, compared with 91.1p in 2012.

Earnings for Lloyd’s of London insurers have been boosted by a decline in costs linked to US hurricanes. Claims against insurers and reinsurers from natural catastrophes dropped 52 percent last year to about $31bn (R335bn), according to Munich Re, the world’s biggest reinsurer.

“The hurricane season was benign and catastrophe claims were benign in 2013,” Inga Beale, who in January became the market’s first female chief executive, said in an interview.

“This is the highest profit since 2009.”

Last year’s results were also boosted by a release of £1.6bn of reserves previously set aside for claims. That compares with £1.4bn in 2012. Investment income declined 36 percent to £839 million. - Bloomberg

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