2015 Interim Results

Transcription

1 2015 Interim Results

2 Highlights Solid achievement in the first six months with a profit of 1.19bn and RoC of 10.7% 1 Combined ratio of 89.5% outperforms that of our competitor group for H1 by 3.3 percentage points Net resources of 22.8bn Pricing continues to be under pressure in an intensely competitive environment Investment income reduced in first half of year and future returns are uncertain due to volatility in financial markets ¹RoC calculated on an annualised basis 2

3 Results at a glance Jun 2014 Jun 2015 Gross written premiums m 14,481 15,513 Combined ratio (%) Investment return (%) Profit before tax m 1,652 1,194 Return on Capital 1 (pre-tax) (%) Source: Lloyd's pro forma financial statements, 30 June annualised basis 3

4 Lloyd s outperforms competitor group Combined Ratios % H H H H H Competitor Group Lloyd's Source: Lloyd s pro forma financial statements, 30 June 2015; competitor group formed of 11 companies operating in US, European and Bermudan markets. These companies are Ace, AIG, Arch, Everest Re, Hannover Re, Mapfre, Munich Re, Partner Re, SCOR, Swiss Re, XL. 4

5 Financial Results 5

6 Profit reduced through lower investment returns and m Jun 2013 Jun 2014 Jun 2015 YTD % change Gross written premium 1 15,496 14,481 15, Net earned premium 9,592 9,511 10, Net earned claims (4,853) (4,693) (5,018) +7 GWP % Prices 5-5 Currency movements +6 New syndicates 6 +1 Existing syndicates +5 Total +7 Net operating expenses 2 (3,478) (3,619) (3,966) +10 Underwriting result 1,261 1,199 1, Investment return FX gain / (loss) - (99) (85) -14 Other income/(expenses) 4 (129) (95) (113) +19 Profit before tax 1,379 1,652 1, Investment return % Increasing profitability % Combined Ratio Source: Lloyd s pro forma basis, 1 GWP restated for Special Purpose Syndicates (see glossary in Annual Report), 2 Technical account, 3 Return on syndicates assets, members funds at Lloyd s and central assets, 4 Non-technical account, 5 Prices = Risk adjusted rate 6 Syndicates that started trading in

7 pressure on current prices and expenses Combined Ratios Analysis of accident year ratio excl major claims (%) HY % % 2.7% (8.0%) 89.5% Loss ratio Expense ratio Total Major claims ( m) Pemex 173 HY Other (largest 39m; : largest 75m) Total % 1.4% (8.0%) Reserve release ( bn) % % Net earned reserves b/fwd Release Release % of reserves AY excl. Major claims Major claims Source: Lloyd's pro forma financial statements, 30 Jun 2015 Prior year reserve movements Calendar year 7

8 Low major claims below the long term average, though modestly higher than 2014 LLOYD S MAJOR CLAIMS: NET ULTIMATE CLAIMS 5,000 4,500 4,000 3,500 3,000 m 2,500 2,000 1,500 1, yr H1 average 530m 5 yr H1 average 1,222m H1 H2 Indexed to June Claims in other currencies translated at the exchange rate prevailing at the date of loss. Excl year H1 average 530m.; 5 year H1 average 1,222m 8

9 Accident year ratios across all classes impacted by pressure on rates Accident year including major claims % Marine 9% Premiums by class Motor Energy 5% 5% Aviation 2% Reinsurance 33% Casualty 21% Property 25% Cat exposed NEP: 3.3bn 2.5bn 2.1bn 0.9bn 0.5bn 0.5bn 0.2bn Source: Lloyd s pro forma financial statements, June 2015; NEP: Net Earned Premium 9

10 On a calendar year basis all classes experiencing continued prior year releases % Accident Year including major claims NEP: 3.3bn 2.5bn 2.1bn 0.9bn 0.5bn 0.5bn 0.2bn Calendar Year after prior year releases Reinsurance Property Casualty Marine Energy Motor Aviation % Property reinsurance Casualty reinsurance Specialty reinsurance NEP Specialty Reinsurance Aviation 19% Energy 30% Marine 51% NEP: 1.6bn 0.8bn 0.9bn Source: Lloyd s pro forma financial statements, June 2015; NEP: Net Earned Premium; 1 Includes Motor 10

11 Modest returns reflect the low interest rate environment and volatility in June Syndicate level assets Funds at Lloyd s Central Fund & other mutual assets Weighted average 14% 15% 7% 57% 2 29% 28% 29% 56% 11% 61% 79% 14% Investment grade bonds Equity & other Cash Asset value ( bn) Asset value ( bn) Asset value ( bn) Asset value ( bn) Return ( m) Return ( m) 1 76 Return ( m) 1 26 Return ( m) Return (%) Return (%) Return (%) Return (%) H1 return (%) H2 return (%) Source: Lloyd s pro forma financial statements, 30 June 2015; 1 Actual returns for 6 months, ending 30 June 2015; ² Includes letters of credit in the amount of 8.1bn ; ³ Gross invested central assets, stated on IFRS basis; 4 As at June

12 Stable net resources after profit distribution of over 2bn m June 2014 Dec 2014 June 2015 % change Cash and investments 50,153 54,857 52,537-4 Reinsurers share of unearned premiums 2,891 1,976 3, Reinsurers share of claims outstanding 8,497 8,785 8,676-1 Other assets 15,626 14,075 17, Total assets 77,167 79,693 82, Gross unearned premiums (13,895) (12,653) (15,258) +21 Gross claims outstanding (36,519) (38,134) (37,258) -2 Other liabilities (5,973) (5,492) (6,703) +22 Net resources 20,780 23,414 22,844-2 Represented by: Members assets 18,333 20,836 20,189-3 Central assets 2,447 2,578 2, TOTAL 20,780 23,414 22,844-2 Solvency Surplus 3,215 3,221 3, Source: Lloyd s pro forma financial statements, 30 June 2015; Note: Central assets are the net assets of the Society including the Central Fund, excluding subordinated debt liabilities and the callable layer

13 Summary 13

14 A solid set of results To recap Profits reduced from exceptional high of 2014 Profit of 1.2bn with annualised RoC of 10.7% Net resources of 22.8bn Looking ahead Intense pressure on premium levels and expense ratios Ongoing low investment returns Market oversight Ease of doing business Global market access Source: Lloyd's pro forma financial statements, 30 June

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