Qld floods add to Lloyd's loss

Global insurer Lloyd's of London stumbled to a major loss on the back of numerous catastrophes including the 2011 Queensland floods.
Global insurer Lloyd's of London stumbled to a major loss on the back of numerous catastrophes including the 2011 Queensland floods. Rob Williams

LLOYD'S  of London stumbled to a major loss of £516m in a year of what the insurance market called "unprecedented catastrophe", but bonuses for senior executives still rose. The losses are topped only by those made in 2001, when the 9/11 terror attacks put Lloyd's in the red to the tune of £3.1bn.

A series of major disasters last year, including floods in Australia and earthquakes in New Zealand, saw Lloyd's insurers face claims of £12.9bn. That they were able to pay these claims will be taken as a sign of the market's strength, especially given that low interest rates mean insurers are getting a low return on the premiums they take in from customers.

Richard Ward, the chief executive, said: "Make no mistake, 2011 was a difficult year for the insurance industry. Given the scale of the claims, a loss is unsurprising, but it reflects what we're here to do - help communities and businesses rebuild after disaster.

"It is also reassuring that, despite this loss, our financial strength has been maintained," he added.

Mr Ward picked up a bonus of (pounds sterling)752,000 for his work in 2011, taking his total pay to £1.44m. That is down a bit on a year earlier, but the bonus payment was higher.

Lloyd's noted that no one picked up a "market performance bonus" due to the lack of profits. The bonuses they did get "come through from previous years," a Lloyd's spokesman said.

Tom Bolt, the director of performance management, saw his bonus stay level at £450,000, taking his total pay to just over £1m. Luke Savage, the finance director, received £893,000 including a £338,000 bonus, up by £13,000. The remuneration committee is chaired by Andreas Prindl. His pay for a part-time role rose £20,000 to £104,000.

Mr Ward thinks that the losses mean that rates should rise, but the amount of capital flowing into the market is keeping them low. He said: "I am disappointed that, given the exceptional level of catastrophes in 2011, insurance rates have not responded more positively. These events demonstrate the need for the industry to show discipline in terms of pricing."

Asked if he believed in global warming, Mr Ward said that was for those "better qualified" to discuss. But he added: "The severity and frequency of hurricanes, windstorms and typhoons is increasing. When I see my daffodils coming out in January, I do wonder."

Lord Levene, the chairman since replaced by John Nelson, was paid £538,000 for his non-executive role.

Topics:  insurance

Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Snitz sizzles to win qualifier with ease

IN FULL FLIGHT: Brisbane jockey Robbie Fradd streaks clear to win the $150,000 NRRA Country Championships qualifier on board Snitz, trained by Matt Dunn, at Clarence River Jockey Club.

SHORT priced favourite sends everybody home happy.

Ballina Players brings popular military drama to the stage

ON STAGE: John Rado as Colonel Nathan Jessep and Dylan Wheeler as Lt Daniel Kaffee in the Ballina Players production of A Few Good Men.

Tickets are on sale for their new production of A Few Good Men

Triumph of dreams ... it all started with one bike

A CLASSIC: Meerschaum Vale's Col McAndrew with his Triumph 1956 Speed Twin which he will show at the Northern Rivers Classic Motorcycle Club's Show and Shine at Alstonville Plaza on March 18.

Col has six classic bikes; 100 expected at show

Local Partners