Lloyd’s of London expects to take a hit of hundreds of millions of pounds on its profits as a result of recent financial market turmoil, its boss has revealed.
Chief executive John Neal told the Mail the volatility – which has sunk US bank Silicon Valley Bank as well as Credit Suisse – would put a dent in otherwise bumper investment returns this year.
Neal was speaking as the London insurance market reported a rise in underwriting profits to £2.6billion in 2022 but a big paper loss on the value of its investments.
Insurer Lloyd’s of London is braced to take a huge hit to its profits as a result of the chaos in the banking sector
That pushed it to an annual pre-tax loss of £769millio last year. For the current year, Neal said the volatility could put a dent in an expected 3 per cent, or £3billion, return on its £100billion assets under management.
‘If you looked at a prudent case then the impact on your investment opportunity is in the hundreds of millions – you could reduce the investment return by hundreds of millions,’ Neal said.
That will still leave profit on investment that is ‘a lot more than it has been for a long, long time’ after years of ultra-low interest rates, he said.
The comments came as the firm reported it had doled out more than £21billion in claims payments last year as a result of natural catastrophes and the war in Ukraine which had pushed it into the red.
Chairman Bruce Carnegie-Brown said the environment last year had been ‘difficult for everyone’ and that the series of ‘overlapping crises’ had created a ‘complex set of challenges’.
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