(Bloomberg) -- Lloyd’s of Londonreported a 30% drop of full-year profit as the world’s largestinsurance market was hurt by continued pressure on pricing and thelowest investment returns since at least 2001.
|Earnings declined to 2.1 billion pounds ($3 billion) for2015 as income from investments, primarily fixed income, sank 60%to 400 million pounds, according to the company’s annual reportWednesday. Weaker pricing in 2015 is expected to continue thisyear, it said.
|“We’ve taken a double hit from reduced margins in underwritingand lower investment yield,” Chief Executive Officer Inga Bealesaid in an interview with Bloomberg Television Wednesday. “On theinvestment side we saw a dramatic reduction in 2015 that was amassive hit” to earnings.
|Related: Q&A: Lloyd's CEO Inga Beale
|Beale said the low interest-rate environment and a “healthy”return on capital of 9.1% continued to attract new money into theindustry, placing further pressure on insurance rates that havealready seen double-digit declines.
|It’s so-called combined ratio rose to 90% from 88.4% amid higherclaims in the energy sector and the explosion at Tianjin Port inChina. An increase in the ratio indicates adeterioration in profitability.
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