Lloyd’s Posts AUD$850 Million Overall Loss for 2011

News >> News on Insurance

Lloyd’s of London proved just how severe the second costliest year for catastrophes on record for the insurance industry actually was. They announced a loss of £516 million ($822 million) for 2011. To be perfectly honest, while this appears large, it is a lot less than I would have expected when considering the number and scale of claims.

Lloyd’s reported that it had incurred total net claims of £12.9 billion (AUD$22 billion) during 2011, including £4.6 billion (AUD$8 billion) of catastrophe claims, this made it the ”largest catastrophe claims year on record for the 324-year-old insurance market.”

The claims from the world’s global catastrophes included flooding here in Australia in January 2011, the second earthquake in New Zealand in February, the Japanese earthquake and tsunami in March and the floods in Thailand beginning in July.

Lloyd’s Chief Executive Richard Ward stated: “Make no mistake, 2011 was a difficult year for the insurance industry. Given the scale of the claims, a loss is unsurprising but it reflects what we’re here to do – help communities and businesses rebuild after disaster.

“It is also reassuring that, despite this loss, our financial strength has been maintained,” he added. “It’s testament to Lloyd’s robust oversight and professionalism in the market today.

However he was disappointed that due to such a high level of catastrophes in 2011, insurance rates have not responded as a result. To us Brokers, this is due to the high capacity that still exists and the intense competition keeping prices down. As always it is interesting why the industry does not show more discipline in terms of premium rates by increasing them accordingly as there is certainly a risk of insurers becoming insolvent if hit too hard by catastrophe claims. Especially as insurers are not getting the returns they once were on the cash reserves they hold. It does demonstrate the Insurance Industry’s resilience.

Lloyd’s Chairman John Nelson pointed out: “The Lloyd’s market has emerged from its largest catastrophe year ever in a strong position. Our strong capital position is unchanged and we were able to make a profit in the second half of the year despite the floods in Thailand and continuing low investment returns.”

He also noted that “2012 remains challenging for insurers with tough economic conditions globally. It is vital that the market continues to take a disciplined approach to underwriting.”

Lloyd’s Annual Report listed the following financial highlights:

  • Loss before tax of £516 million (AUD$822 million); 2010: profit of £2.195 billion (AUD$3.8 billion).
  • Combined ratio of 106.8 percent (2010: 93.3 percent) – in line with an estimated average of:
    • 108 percent for US property and casualty insurers;
    • 107 percent for US reinsurers;
    • 105 percent for Bermuda insurers and reinsurers,
    • 101 percent for European insurers and reinsurers.
  • Total resources of the Society of Lloyd’s and its members at £58.870 billion (AUD$100 billion); 2010: £55.230 billion (AUD$95 billion).
  • Central assets at £2.388 billion (AUD$4.5 billion); 2010: £2.377 billion (AUD$4.3 billion).
  • Investment return of £955 million (AUD$1.8 billion); 2010: £1.258 billion (AUD$2.5 billion).
  • Prior year reserve surpluses of £1.173 billion (AUD$2 billion); 2010: £1.016 billion (AUD$1.8 billion).

Source: Lloyd’s of London


Last changed: Apr 01 2012 at 1:07 PM


  1. None Found

Add Comment

Latest News

Three Years running - Insurance Brokerage of the Year 1 to 5 staff

Mandy and Robert Cooper were extremely honoured and astounded to once again win, Insurance Brokerage of the Year for 2020 from Insurance Business Australia magazine. This is the third year running.

While this year has not been the easiest of years for the business with Covid 19, the Recession, the hard market and issues at Lloyds of London, we are literally all in this together as an Insurance Industry.

CPR Insurance Services continues to make our clients the number one focus of our business while managing our relationships with Insurers, who we need more than ever in this market climate.

CPR Insurance Services are a highly ethical Brokerage with a reputation as a trusted advisor who always acts in the Client's best interests. Their experience, knowledge and expertise is amongst the highest in the industry.

CPR Insurance Services is now ten years old as a business and is proud of being an Authorised Representative of Ausure and their partnership with Steadfast, giving CPR the strength and backing to match it with any Broking firm in the Insurance Industry, but remain focussed on supporting the Small to Medium business segment.

Memberships of the National Insurance Brokers Association, Australia and New Zealand Institute of Insurance and Finance, Australian Insurance Law Association, Australian Professional Indemnity Group and the Australian Institute of Company Directors, ensures CPR Insurance Services maintains the high standard of knowledge and expertise required to be one of the best Brokerages in Australia.

CPR Insurance Services also plays a strong role in their local community supporting other Sporting Clubs and Community organisations. They also support and promote local businesses with their operation of the Kedron Brook Business Group who meet regularly and has 174 members.

We are truly honoured to receive this National award once again for the third year as a recognition of CPR Insurance Services contribution.

read more

Finalist for QLD Broker of the Year

Robert Cooper was honoured to be nominated as a finalist for Queensland Insurance Broker of the year for 2020, as part of the National Insurance Brokers Association. Unfortunately he missed out on the ultimate award but is a reflection of the high standard that the industry now has for such awards.

read more