Lloyd’s has today released its global results (based on the aggregation of all syndicate results) for the year ended 31 December 2013. These show total profit up by 15% on 2012 to £3.2 billion, with gross written premiums up by around 2%. At 86.8%, the combined ratio is the best since 2009.

The results were helped by a release from reserves of £1.5 billion, reducing the combined ratio by 8%. Catastrophe losses were also lower than they have been for the last four years. For the first time since 1968, there were no category 2 or higher hurricanes in the Atlantic, and there were just two category 1 storms. Nonetheless, Lloyd’s made payments to policyholders for typhoon losses in the Philippines, floods and winter storms in Canada and floods and hailstorms in central Europe. Catastrophe claims to the market totalled almost £900 million, which is less than half of the ten year average.

Results in Summary

 

 

 

2013

2012

2011

2010

2009

2008

Gross written premiums

£m

26,103

25,500

23,477

22,592

21,973

17,985

Net written premiums

£m

20,231

19,435

18,472

17,656

17,218

14,217

Result for the year before tax

£m

3,205

2,771

-516

2,195

3,868

1,899

Ratios

 

           

Combined ratio

%

86.8

91.1

106.8

93.3

86.1

91.3

Return on capital

%

16.2

14.8

-2.8

12.1

23.9

13.7

                 

Lloyd’s conservative investment strategy, based around short dated high quality bonds, meant that investment returns were again thin, with syndicate investment returns just 1.1% in 2013. The return on central assets (principally those held by the Central Fund) was slightly better at 2.3%.

The full results are available here and the Lloyd’s press release is here.

Lloyd’s has also released results and forecasts for the 2011 and 2012 accounts, as well as details of those syndicates that will be making an early release of profit from the open 2012 and 2013 accounts. A full summary is available here. Syndicates featuring third party capital once again have outperformed the aggregate market. The average 2011 year of account result for syndicates with third party capital is a profit of 6.3% of capacity, compared with a return of 4.0% for the wholly aligned syndicates. The gap has narrowed slightly for 2012, with spread syndicates forecasting an average profit of 6.7% of capacity compared with the wholly aligned syndicates’ forecast returns of 5.2%.

We will be providing further analysis and commentary on Lloyd’s results both in a special bulletin to be published next week and also in the next edition of the Argenta Quarterly Update, due in April.