Lloyd's of London has announced 516 million pound loss for 2011 following the largest catastrophe claims year on record for the 324-year-old insurance market.
Lloyd's incurred total net claims of £12.9bn during 2011, including £4.6bn of catastrophe claims.
This was the second biggest loss on record for the specialist insurance market, which is made up of 80 competing insurance syndicates.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
It follows a series of major catastrophes including flooding in Australia in January, a second earthquake in New Zealand in February, the Japanese earthquake and tsunami in March and the floods in Thailand beginning in July.
Lloyd's reported a combined ratio of 106.8%, which compared to 93.3% in 2010.
A combined ratio is a measure of an insurer's underwriting profitability based on the ratio of net incurred claims plus net operating expenses to net earned premiums.
A combined ratio of 100% is break even. A ratio of over 100% is a loss, less than 100% is a profit.
Lloyd's said this result was in line with other markets, with an estimate of 108% for US property and casualty insurers at the high end and 101% for European insurers and reinsurers at the low end of the spectrum.
Chief Executive Richard Ward said it was reassuring that, despite the loss, Lloyd's financial strength had been maintained.
"However I am disappointed that, given the exceptional level of catastrophes in 2011, insurance rates have not responded more positively," he said.
"These events demonstrate the need for the industry to show discipline in terms of pricing."
-
A junior ISA could turn your child’s pocket money into thousands of poundsPersuading your child to put their pocket money in a junior ISA might be difficult, but the pennies could quickly grow into pounds – and teach them a valuable lesson about money
-
Cost of Christmas dinner jumps 6.5% as grocery price inflation rises againThe average Christmas dinner for four now costs £32.57 as grocery price inflation increases - but what does it mean for interest rates?
