The Lloyd’s of London insurance and reinsurance market reported a £0.9bn loss for 2020 after significant impacts from the COVID-19 pandemic dented performance, despite significant reinsurance recoveries.In total, Lloyd’s reported an aggregated market loss of £0.9bn for 2020, down from a £2.5bn profit for 2019.Driving performance down was, of course, the COVID-19 pandemic, which causes £6.2 billion of gross losses during the year.Reinsurance markets played a significant role in supporting Lloyd’s syndicates and underwriters in relative to COVID, as recoveries of £2.6 billion were reported, dropping the net pandemic loss for the Lloyd’s market to £3.4 billion.

John Neal, Lloyd’s CEO, commented on the results, “Following an extremely challenging year marked by a global health crisis of a scale never seen before, Lloyd’s continued to support its customers with pay outs expected to total £6.2bn in COVID19 claims.The year was also marked by a high frequency of natural catastrophe claims and the UK’s formal exit from the EU, driving further losses and uncertainty.“Against this unprecedented backdrop we have made good progress across our performance, digitalisation, and culture transformation plans.

Our disciplined underwriting approach and determination to become the world’s most advanced insurance marketplace have set us up for real success this year alongside the continued positive rate momentum that will see the market supporting growth for the first time in four years.” Positively, underlying underwriting has improved across the Lloyd’s insurance and reinsurance market, with the combined ratio for 2020 coming out at 97%, excluding COVID impacts.That led to an underwriting result of £1.9 billion being reported.But if you include COVID-19 losses, Lloyd’s combined ratio rises to 110.3%, the highest since 2017.

“While Lloyd’s has reported an aggregated loss of £0.9bn, this was driven by incurred COVID- 19 losses of £3.4bn, adding 13.3% to the market’s combined operating ratio of 110.3%.Alongside COVID-19, the busy natural catastrophe season amounted to an additional £2.5bn of major claims.Despite those challenges, the market’s combined ratio has shown substantial improvement over the past three years, dropping to 97.0% in 2020, excluding COVID-19 claims.

This represents a 5.1 percentage point improvement on 2019 (102.1%) and a 7.5 percentage point improvement on 2018 (104.5%).We are further encouraged by a 5.4 percentage point improvement in the attritional loss ratio when compared with 2019, which has dropped to 51.9%,” CEO Neal explained.———————————————————————.All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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