Lloyd's Looks Good In '04: Guy Carpenter

NU Online News Service, June 23, 10:44a.m. EDT?The Lloyd's Market has performed impressivelysince 2001 and the trend should continue this year, absentunforeseen circumstances, the chairman of a global risk managementfirm said.[@@]

Geoff Bromley, chairman of Guy Carpenter & Company Ltd.'sEuropean and Asia Pacific Operations, gave that opinion with therelease of his company's annual, comprehensive review of theLloyd's Market titled The Lloyd's Market in 2004.

The report, which was prepared by a team led by Guy CarpenterVice President Mike Van Slooten, noted the continued strengtheningof Lloyd's results since the U.S. terrorist attacks in September2001:

? On a pro forma annually accounted basis, Lloyd's profits morethan doubled to a record ?1.9 billion for 2003($3.4 billion usingyear-end exchange rates), after prior year reserve strengthening of?545 million ($969 million). Gross and net written premium reachedrecord highs of ?16.4 billion ($29.2 billion) and ?12.3 billion($21.9 billion), respectively.
? The combined ratio improved to 90.7 in 2003 from 98.6 in2002.
? Net resources?defined as total assets less policyholder and otherliabilities--stood at ?10.1 billion ($18.0 billion) at the end of2003, a 150 percent increase since the end of 2001.
? Lloyd's financial strength ratings, as measured by Standard &Poor's and A.M. Best, continue to demonstrate great stabilityrelative to the wider market, having been lowered by only one notchsince their introduction in 1997.

Mr. Bromley said, "The turnaround in Lloyd's financialperformance since 2001 is impressive and, absent any unforeseencircumstances, we would expect 2004 to be another healthy year.While the difficult market of the past few years has certainlycontributed to the improvement, there is little doubt that thefranchise reforms implemented have also played a role."

The report also provides an overview of the activitiesundertaken by the Franchise Performance Directorate and Lloyd'sefforts in business process reform.

In its first full year of operation, Guy Carpenter said, theFranchise Performance Directorate appears to have made goodprogress toward its goal of improving Lloyd's operating performanceacross the business cycle.

Among the Directorate's key accomplishments in 2003, GuyCarpenter said, were new underwriting guidelines, more rigorousbusiness planning and monitoring processes and guidelines topromote efficient run-off management. In addition, significantefforts are being made to improve the market's business processesincluding policy production and premium and claims payment.

"Longer term, Lloyd's success will depend on its continuedability to instill management discipline and sustain meaningfulprocess improvements, especially if faced with changing marketconditions or a series of abnormally high catastrophe losses. Allin all, however, we are pleased with the progress to date andapplaud the vision and commitment of the Lloyd's management team,"Mr. Bromley concluded.

The Lloyd's Market in 2004 is available on the GuyCarpenter website, www.guycarp.com. Printed copies may be obtained bysending a request to [email protected].

Guy Carpenter & Company Ltd., a risk and reinsurancespecialist is a part of the Marsh & McLennan Companies, Inc.Guy Carpenter creates and executes reinsurance and risk managementsolutions for clients worldwide through more than 2,400professionals across the globe.