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Wednesday 27 April, 2016

Lloyds Of London

Lloyd's Interim Management Statement Q1 2016

RNS Number : 5055W
Lloyds Of London
27 April 2016
 

27 April 2016

Lloyd's publishes Interim Management Statement Q1 2016

 

Highlights:

·      Central assets for solvency increased to £3,387m (December 2015: £3,338m) on a Solvency II basis.

·      During the period there have been no events that have resulted in any material changes to our expectations for the full year

The Society of Lloyd's is today publishing its Interim Management Statement for the three month period to 31 March 2016. This statement describes the unaudited consolidated financial position of the Society itself, its subsidiaries and the Central Fund and does not include results of the syndicates operating in the Lloyd's Market.

Operating Review

Strategy

Lloyd's long-term strategy - Vision 2025 - is to be the global centre for specialist insurance and reinsurance. Lloyd's Strategy 2016 - 2018 outlines the plans of the market and Corporation over the next three years in the delivery of this vision.

Financial Review

Excess of central assets over members' losses

 

Management's estimate of the excess of central assets over Members' losses has increased during the period to £3,375m, comprising:

 


31 Mar 

2016 

31 Dec 

 2015 


£m 

£m 

Society net assets

1,801 

1,763 

Subordinated liabilities

882 

882 

Central assets

2,683 

2,645 

Callable layer

833 

822 

Other solvency adjustments

(129)

(129)

Central assets for solvency purposes

3,387 

3,338 

Members' losses       

(12)

(12)

Excess of central assets over Members' losses

3,375 

3,326 

 

 

Investments

Financial markets experienced some turbulence at the beginning of the year, as tensions over the continued fall in oil prices and other deflationary pressures escalated into fears of global recession. Equity markets were highly volatile with losses peaking in February although markets rallied towards end of the quarter, recovering most of their earlier losses. Bond investments produced solid returns over the quarter as demand for safer assets pushed yields lower with only a small reversal being seen in March.

Overall, the Society's investments returned £48m, or 1.7%, during the period (2015: £42m, 1.5%). This amount includes a foreign exchange gain arising from Society currency exposure to US dollars which contributed just under half of the total return. 

 

For further information, please contact:

 

Media Relations:

 

Alex Dziedzan or Stewart Todd

Tel: +44 (0)20 7327 6125 Email: [email protected] 

Tel: +44 (0)20 7327 6272 Email: [email protected]   

 

Investor Relations:

 

Nicola Hartley or Michelle Cunningham

Tel: +44 (0)20 7327 5757 Email: [email protected] 

Tel: +44 (0)20 7327 5434 Email: [email protected]

Notes to Editors

1. A copy of Lloyd's 2015 Annual Report can be accessed at www.lloyds.com

2. Central assets include the assets of the Central Fund and the other assets of the Corporation. In aggregate, the value of Lloyd's central assets, excluding the callable layer and the liability in respect of the subordinated debt and securities, amounted to £2,683m at 31 March 2016. The Society financial statements are prepared in accordance with IFRS.

3. Callable layer:  Central Fund assets may be supplemented by a 'callable layer' of up to 3% of members' overall premium limits in any one calendar year. These funds would be drawn from premium trust funds.

4. This press release includes forward-looking statements. These statements are based on currently

available information and consistent accounting policies as applied at 31 December 2015. They reflect

Lloyd's current expectations, projections and forecasts about future events and financial performance. All

forward-looking statements address matters that involve risks, uncertainties and assumptions. Based on a

number of factors, actual results could vary materially from those anticipated by the forward-looking

statements. These factors include, but are not limited to, the following:

Rates and terms and conditions of policies may vary from those anticipated.

Actual claims paid and the timing of such payments may vary from estimated claims and estimated timings of payments, taking into account the preliminary nature of such estimates.

Claims and loss activity may be greater or more severe than anticipated, including as a result of natural or man-made catastrophic events.

Competition affecting the basis of pricing, capacity, coverage terms or other factors may be greater than anticipated.

Reinsurance placed with third parties may not be fully recoverable, or may not be paid on a timely basis, or such reinsurance from creditworthy reinsurers may not be available or may not be available on commercially attractive terms.

Developments in the financial and capital markets may adversely affect investments of capital and premiums, or the availability of equity capital or debt.

• Changes in legal, regulatory, tax or accounting environments in relevant countries may adversely affect

(i) Lloyd's ability to offer its products or attract capital, (ii) claims experience, (iii) financial return, or

(iv) competitiveness.

• Economic contraction or other changes in general economic conditions could adversely affect (i) the market for insurance generally or for certain products offered by Lloyd's, or (ii) other factors relevant to Lloyd's performance.

• The foregoing list of factors is not comprehensive, and should be read in conjunction with other cautionary statements that are included herein or elsewhere. Lloyd's undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

 

5. Foreign exchange rates may materially fluctuate from the rates prevailing at 31 March 2016

(£1 = US$1.44, £1 = €1.26)



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