Lloyd’s hit as financial turmoil takes its toll

LLOYD’S of London expects to take a hit of hundreds of millions of pounds on its profits as a result of recent financial market turmoil, its boss has revealed.

Chief executive John Neal told the Mail the volatility – which has sunk US bank Silicon Valley Bank as well as Credit Suisse – would put a dent in otherwise bumper investment returns this year.

Neal was speaking as the London insurance market reported a rise in underwriting profits to £2.6bn in 2022 but a big paper loss on the value of its investments.

That pushed it to an annual pretax loss of £769m last year. For the current year, Neal said the volatility could put a dent in an expected 3pc, or £3bn, return on its £100bn assets under management.

‘If you looked at a prudent case then the impact on your investment opportunity is in the hundreds of millions – you could reduce the investment return by hundreds of millions,’ Neal said.

That will still leave profit on investment that is ‘a lot more than it has been for a long, long time’ after years of ultra-low interest rates, he said.

The comments came as the firm reported it had doled out more than £21bn in claims payments last year as a result of natural catastrophes and the war in Ukraine which had pushed it into the red.

Chairman Bruce Carnegie-Brown said the environment last year had been ‘difficult for everyone’ and that the series of ‘overlapping crises’ had created a ‘complex set of challenges’.