Lloyd's of London back in profit on falling claims

Lloyd's of London returned to profit during the first half of 2012, the insurance market announced on Wednesday after it escaped the kind of large claims linked to last year's natural disasters. Lloyd's posted a pre-tax profit of £1.53 billion in the six months to June 30, which compared with a loss of £697 million during the first half of 2011. The latest performance was the group's best half-year showing in five years. "Lloyd's, the world's specialist insurance market, today announced a profit of £1.53 billion for the six-month period ending 30 June 2012," the group said in an earnings statement. "The result follows a benign first half of 2012 for natural catastrophes for the insurance industry, one which saw no major claims, and which marks a return to profit after the second most expensive year on record for the insurance industry in 2011." Lloyd's suffered its second-largest annual pre-tax loss in 2011 -- at £516 million -- owing to record claims for catastrophes including earthquakes in Japan and New Zealand and floods in Australia and Thailand. Lloyd's on Wednesday said it incurred total net claims of £4.584 billion in the first half of 2012 -- a drop of almost one third compared with the equivalent period a year earlier. "This is a welcome return to profit for the market, after a six-month period that could not be in greater contrast to the first half of 2011," Lloyd's chief executive Richard Ward said in the company statement. "The result has certainly been helped by the favourable claims climate. But it is testament to the market's disciplined underwriting that, in the face of continuing low premium rates, coupled with low interest rates and the most challenging economic climate for a generation, it is able to return the strongest half-year result in five years."