Lloyd's of London 2015 profit slumps 30%

Insurance market Lloyd’s of London posted a 30% drop in 2015 profit as investment returns fell and chairman John Nelson said contingency plans were being made for Brexit.

Pre-tax profit slid to £2.1bn last year from £3bn in 2014 as investment return fell to £400m from £1bn. At the same time, the underwriting result slipped to £2bn from £2.3bn. The figures reflect the results of the 97 syndicates that operate in the market.

The insurer’s return on capital fell to 9.1% in 2015 from 14.1% but gross premiums increased to £26.7bn from £25.3bn.

Meanwhile, the combined ratio, which measures underwriting profitability, worsened to 90% from 88.4%.

Chairman John Nelson said: “Each year brings a unique set of challenges, requiring determination, innovative thinking and solutions. This year has been no different. In a market undeniably tougher than seen for many years, we have had to demonstrate our ability to adapt and take action.

“In these conditions, these results are creditable and a tribute to the continued skill and professionalism of the Lloyd's market underwriting community."

Nelson also said on Wednesday that Lloyd’s was making contingency plans for setting up offices in the European Union in case of Brexit, which he reckons would diminish the insurer’s attraction to investors outside Britain.