Lloyd’s of London takes a £6bn hit from Covid claims

TheLloyd’s of London insurance marketplace has suffered its worst result in three years after taking a £6billion Covid hit.

Lloyd’s, which has been a key business in the City for more than 330 years, slumped to a loss of £900million in 2020 from a £2.5billion profit the year before.

The insurance syndicates who make up the market have been lumped with mounting payouts for issues such as business interruption and event cancellation.

Covid slump: Lloyd’s of London insurance, which has been a key business in the City for more than 330 years, slumped to a loss of £900m in 2020 from a £2.5bn profit the year before

They typically provide cover for major events such as the Olympics and Wimbledon, both of which were cancelled last year.

Chief executive John Neal said it had been an ‘extremely challenging year’ with the ‘triple threat’ of coronavirus, a large number of natural catastrophe claims and Brexit.

But he added: ‘Against this unprecedented backdrop we have made good progress across our performance, digitalisation, and culture transformation plans. 

Our disciplined underwriting approach and determination to become the world’s most advanced insurance marketplace have set us up for real success this year.’

Lloyd’s, which is one of the few marketplaces in the City where business is still done face-to-face rather than digitally, has come under pressure to change its culture in recent years amid reports of bullying and harassment.

A survey conducted by the Banking Standards Board in 2019 found almost 500 people working at Lloyd’s had suffered or seen sexual harassment over the past 12 months.

It has a target of getting women into 35 per cent of leadership positions across the market by the end of 2023, and is trying to improve its ethnic diversity.

Trade body the London & International Insurance Brokers’ Association has also recommended that Lloyd’s should ditch its ‘stuffy dress code’, as it still demands workers in its City tower must dress more smartly than at most of the surrounding banks.

But Neal said there were ‘pockets of resistance’ within the marketplace.

He told the Financial Times: ‘Obviously the brokers are not so readily within our control.

‘But we can prevent access to the building, so if people aren’t behaving in accordance with the standards we set, then they are not welcome to come in. It hasn’t actually got to that point.’

The famous underwriting room at Lloyd’s, where insurers usually receive queues of brokers to their desks to haggle over the terms of contracts, closed for a second time in January as the pandemic caused an unprecedented shift to home-working.

It is due to reopen in May – although only with a much-reduced capacity of a few hundred people. It is looking at ways it can use technology to make workers’ and customers’ lives easier.

This post first appeared on Dailymail.co.uk