Lloyd’s of London recently announced it is carrying out a strategic review of all aspects of its business, following a £2 billion (around NZ$3.9 billion) loss in 2017. Executives are seeking to ensure the world’s oldest insurance market remains cost-competitive – and they’re willing to ditch bad business lines if necessary.
In June, Fitch Ratings assigned the market an IFS rating of ‘AA-‘ with a negative outlook due to Lloyd’s underwriting profits being pressurized by worsening attritional losses, lower risk-adjusted premium rates, and high expense ratios. Lloyd’s high exposure to worldwide natural and man-made catastrophes only increased the pressure on the market’s underwriting profits, according to Fitch.
“This year, we’re starting to see an increase in [primary insurers and reinsurers] exiting risky markets, particularly since Lloyd’s announced they’re reviewing the bottom 10% performing lines of their books,” said Graham Coutts, director, Fitch Ratings. “We’re probably going to see more companies willing to [follow the example of Lloyd’s] and completely walk away from poorly performing lines.”
Full article here on Insurance business mag: https://www.insurancebusinessmag.com/nz/news/breaking-news/lloyds-could-move-away-from-risky-lines–will-others-follow-110480.aspx