Lloyd’s of London announced it expects to pay out up to £5bn in COVID-19 customer claims this year on a gross basis.
In the first six months of 2020, the insurance market’s COVID-19 claims after reinsurance recoveries totalled £2.4bn, contributing 18.7% to the market’s combined ratio of 110.4% and driving an overall market loss of £400mln.
Excluding COVID-19 claims, the market’s underwriting profit I'm proved as the combined ratio dropped to 91.7% from 98.8% in 2019.
The market’s net resources increased by 7.2% to £32.8bn as at June 30.
The central solvency ratio was 250% and is expected to be at 200% for the second half of the year.
“The pandemic has inflicted catastrophic societal and economic damage calling for unparalleled measures to stifle the spread of the virus, and to get businesses and economies back on their feet,” said chief executive John Neal.
“Our half-year results demonstrate that our robust approach to performance management and remediation has begun to take effect, evidenced by a significant turnaround in the underlying performance metrics, which give the truest indication of our market’s profitability.”