Lloyds blames rising claims for profits cut

Sep 25 2008 by Henryk Zientek, Huddersfield Daily Examiner

Today’s half-year report said claims frequency was rising – particularly for property, casualty and energy-related claims, fuelled in part by the worsening economic climate and political instability in some parts of the world.

It said: “This increase in frequency is coupled with heavy claims inflation, fuelled by the escalating cost of raw materials.”

The Lloyd’s market, which is home to 75 insurance syndicates, has shown in recent years that it is more than able to cope with major catastrophes.

Lloyd’s has modernised the market by introducing a new franchise structure and phasing out the number of “Names” who backed the market with an unlimited liability.

The market made a £3.8bn profit in 2007 after the insurance market benefited from a limited exposure to catastrophes.