Lloyd's of London has reported a loss of £516m ($822m) during the fiscal year 2011 compared to a profit of £2.1bn during the same period in 2010, mainly attributed by the second year for catastrophes for the insurance industry.
During 2011, Lloyd’s incurred total net claims of £12.9bn (€14.8bn), including £4.6bn (€5.3bn) of catastrophe claims, making it the largest catastrophe claims year on record for the 324-year-old insurance market.
The insurer was largely affected by a series of major catastrophes such as flooding in Australia in January 2011, the second earthquake in New Zealand in February, the Japanese earthquake and tsunami in March and the floods in Thailand beginning in July 2011.
The insurance firms paid total claims worth $107bn from natural catastrophes in 2011.
The central assets were £2.3bn during the fiscal year 2011, which was £2.3bn during the corresponding period last fiscal.
According to the financial sheet of the UK insurer its investment return in 2011 remained £955m against £1.2bn year-over-year.
Lloyd’s chief executive Richard Ward said that 2011 was a difficult year for the insurance industry.
"It is also reassuring that, despite this loss, our financial strength has been maintained. It’s testament to Lloyd’s robust oversight and professionalism in the market today, Ward added.
"However I am disappointed that, given the exceptional level of catastrophes in 2011, insurance rates have not responded more positively. These events demonstrate the need for the industry to show discipline in terms of pricing."
Lloyd’s chairman John Nelson said the Lloyd’s market has emerged from its largest catastrophe year ever in a strong position.
The firm’s strong capital position is unchanged and we were able to make a profit in the second half of the year despite the floods in Thailand and continuing low investment returns.
"2012 remains challenging for insurers with tough economic conditions globally. It is vital that the market continues to take a disciplined approach to underwriting," said Nelson.