Lloyd’s Issues 2003 Annual Report
Lloyd’s has issued its 2003 Annual Report, giving details of the year’s results, and describing the London market’s general financial condition and future prospects.
The introduction described 2003 as a success, noting that “the Lloyd’s market continued to trade strongly and remained focused upon maximising the opportunities afforded by excellent trading conditions. This resulted in another year of substantial profits and continuing high levels of premium income justified by the strong premium rating environment.”
It also sounded an optimistic note on future developments, indicating that “the market is well positioned to trade forward successfully. While there were significant shifts in the financial strength ratings of several of the world’s highest rated reinsurers and insurers, Standard & Poor’s and AM Best both affirmed their financial strength ratings of the Lloyd’s market at A (Strong) and A- (Excellent) respectively. Lloyd’s is proud to have maintained stable security during a time of considerable upheaval for insurance buyers and cedants.”
CEO Nick Prettejohn reviewed some of the major changes Lloyd’s has made in the last few years. The Lloyd’s Franchise Board, created in 2002 to replace the Lloyd’s Market Board and the Lloyd’s Regulatory Board, continues to successfully integrate the new strategy and procedures. He noted that the newly established Franchise Performance Directorate “under the leadership of Rolf Tolle, now operates as a core unit of the Franchisor and has recruited a strong team with relevant underwriting and market knowledge. The unit has successfully completed the first stage of the Franchisee business planning cycle through its review of syndicate business plans for the 2004 year of account.”
Prettejohn described Lloyd’s ongoing progress in improving risk management in order to avoid problems before they become serious. He said that Lloyd’s development of its licensing, service and brand strategy was being successfully pursued, and that the lengthy task of reforming the market’s processing procedures to implement technological advances to reduce the time consuming and expensive procedures Lloyd’s has used historically, was beginning to show results. He also said that the move to annual accounting was proceeding smoothly.
Closing his remarks, Prettejohn expressed confidence in Lloyd’s future. He warned, however that the recent favorable results should “not give us cause for complacency; if we are to achieve our goals of a strong and stable marketplace there is still much to be done. We must now build on the foundations laid down in the last couple of years to develop the dynamic entrepreneurial environment that will provide a distinctive and attractive marketplace for brokers, policyholders and capital providers. I am very pleased that our capital providers demonstrated their continued confidence in the market by providing capacity of £15 billion [$26.7 billion] for the 2004 year. Equally, the market must be prepared to reduce its underwriting when conditions are less favourable.”
He concluded with praise for the “dedicated, professional and enthusiastic commitment of all Corporation staff,” and singled out Andrew Moss, who’s leaving Lloyd’s at the end of this month to become CFO of Aviva, for his “outstanding contribution during his three and a half years at Lloyd’s, not least at the time of September 11 and in the work of the Chairman’s Strategy Group and its implementation.”
The full report is available on Lloyd’s Web site at: www.lloyd’s.com.