Lloyd’s of London is poised to hit hundreds of millions of pounds as the financial market turmoil takes its toll
Lloyd’s of London expects a loss of hundreds of millions of pounds on its profits as a result of the recent turmoil in the financial markets, the boss has revealed.
Chief executive John Neal told the Mail that the volatility — which sank both US bank Silicon Valley Bank and Credit Suisse — would put a dent in otherwise great investment returns this year.
Neal spoke as the London insurance market reported an increase in insurance profits to £2.6bn by 2022, but a large paper loss on the value of his investments.
Insurer Lloyd’s of London is about to take a huge profit margin as a result of the chaos in the banking sector
That pushed it to an annual pre-tax loss of £769m last year. For the current year, Neal said volatility could put a dent in the expected return of 3 percent, or £3 billion, on £100 billion of assets under management.
“If you look at a prudent case, the impact on your investment opportunity is in the hundreds of millions — you could reduce the return on investment by hundreds of millions,” Neal said.
That will still yield investment returns that are “much more than it has been in a long, long time” after years of ultra-low interest rates, he said.
The comments came as the company reported that it had paid out more than £21 billion in claims last year due to natural disasters and the war in Ukraine that had pushed it into the red.
Chairman Bruce Carnegie-Brown said the environment had been “difficult for everyone” last year and the series of “overlapping crises” had created a “complex set of challenges.”