Lloyd's Looks Good In '04: Guy Carpenter

Lloyd's Looks Good In '04: Guy Carpenter

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

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

The report, which was prepared by a team led by Guy Carpenter Vice President Mike Van Slooten, noted the continued strengthening of Lloyd's results since the U.S. terrorist attacks in September 2001:

? On a pro forma annually accounted basis, Lloyd's profits more than doubled to a record ?1.9 billion for 2003($3.4 billion using year-end exchange rates), after prior year reserve strengthening of ?545 million ($969 million). Gross and net written premium reached record 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 in 2002.
? Net resources?defined as total assets less policyholder and other liabilities--stood at ?10.1 billion ($18.0 billion) at the end of 2003, 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 stability relative to the wider market, having been lowered by only one notch since their introduction in 1997.

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

The report also provides an overview of the activities undertaken by the Franchise Performance Directorate and Lloyd's efforts in business process reform.

In its first full year of operation, Guy Carpenter said, the Franchise Performance Directorate appears to have made good progress toward its goal of improving Lloyd's operating performance across the business cycle.

Among the Directorate's key accomplishments in 2003, Guy Carpenter said, were new underwriting guidelines, more rigorous business planning and monitoring processes and guidelines to promote efficient run-off management. In addition, significant efforts are being made to improve the market's business processes including policy production and premium and claims payment.

"Longer term, Lloyd's success will depend on its continued ability to instill management discipline and sustain meaningful process improvements, especially if faced with changing market conditions or a series of abnormally high catastrophe losses. All in all, however, we are pleased with the progress to date and applaud the vision and commitment of the Lloyd's management team," Mr. Bromley concluded.

The Lloyd's Market in 2004 is available on the Guy Carpenter website, www.guycarp.com. Printed copies may be obtained by sending a request to marketing@guycarp.com.

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