UK Edition
Hurricanes, wildfires and floods push Lloyd's of London to £2bn loss
Lloyd’s of London has swung to a loss for the first time in six years after one of the most expensive years ever for natural catastrophes battered its profits.
The insurance market unveiled a pre-tax loss of £2bn for last year, a significant drop on the £2.1bn of profit it made in 2016, as the amount it paid out for claims more than doubled following a series of devastating storms.
Hurricanes Harvey, Irma and Maria wreaked havoc in the US and the Caribbean in the second half of last year, pushing up claims to £4.5bn along with wildfires in California, an earthquake in Mexico, monsoon flooding in Bangladesh and a mudslide in Colombia.
The storms alone are estimated to cost the insurance industry more than £100bn, with Lloyd's of London insurer Hiscox scrapping bosses' bonuses for the year after swallowing a £160m claims bill.
Senior executives at Lloyd's of London, including chief executive Inga Beale, missed out on a payout linked to Lloyd's performance plan for the year as the company has to make a £100m profit to pay up.
That caused her total pay to dip 13pc, from £1.5m to £1.3m for the year. In comparison the boss of Hiscox saw his pay nosedive 44pc for 2017 while the chief executive at its rival Beazley took a 22pc pay cut.
Ms Beale described last year as "incredibly tough" due to the challenging market conditions and the significant impact of the natural catastrophes.
Chairman Bruce Carnegie-Brown added that the market had now paid more than half of the claims linked to storms Harvey, Irma and Maria and is in the process of paying the rest. He said: "After a number of relatively benign catastrophe years, the second half of 2017 demonstrated the precarious nature of the world in which we live."
The company said in its annual report that "completing our readiness" for Brexit would be a priority this year. The 330-year-old organisation is opening an EU hub in Brussels as a result of the vote, and confirmed on Wednesday that this would be ready by January.