Lloyd’s lost £2.378bn in the 2001 year of account, reported the Association of Lloyd’s Names (ALM) in its Lloyd’s Results Summary.
The £2.378bn figure included £251m in loss from prior years reinsured into the 2001 year of account, and £285m in losses from earlier syndicate years in runoff.
The total deterioration on prior years amounted to £536m, or 4.8% of 2001 capacity. ALM said this was largely due to reserve strengthening on US liability business written in the 1997 to 2001 period.
The September 11 attacks were the main contributing factor to the £1.842bn pure year loss, representing 16.4% of capacity. The terrorist attacks accounted for approximately £1.329bn, or 72% of the total loss.
Of the 112 syndicates trading in 2001, 29 were left open.
Looking at the 2002 and 2003 year of account, ALM said managing agents had forecast profits of £1.671bn and £1.780bn respectively, representing profits of 12.6% and 11.9% of capacity.
ALM said it believed both of these estimates were very conservative and that despite the effect of the fall in the dollar, particularly in 2002, the eventual out-turn for the pure year in each case would be in the range of 15% to 20% of capacity.
The net incurred loss ratio statistics for 2002 and 2003 are significantly better than for 1993 to 1995, the peak of the previous cycle, said ALM. Lloyd’s made successive pure year profits of 12.3%, 9.3% and 9.9% for 1993, 94 and 95.
ALM said trading conditions to date in 2004 were almost as good as they had been in 2003. Rates have fluctuated in different sectors, with property rates falling while liability rates increased, but, subject to average claims experience, the 2004 account appears to have the makings of another very good year, it said.
For 2005, the conditions supporting the hard market appear likely to continue, added ALM.
