Lloyd’s of London says 2007 profits up

LONDON (Reuters) – The Lloyd’s of London insurance market’s profit rose 5 percent last year as it benefited from a low level of disaster claims, but it warned on Thursday that this had resulted in pressure to reduce premiums.

The world’s oldest and biggest insurance market reported a 2007 pretax profit of 3.85 billion pounds ($7.6 billion), up from 3.66 billion in 2006.

Lloyd’s combined ratio, a key performance benchmark, weakened to 84 percent from 83.1 percent in 2006.

The combined ratio measures costs and claims as a percentage of premiums, so the further it is below 100 the more profitable underwriting has been. Lloyd’s said its ratio compared favourably to averages for U.S., European and Bermudan rivals.

The market’s central assets, which underpin its financial strength ratings and would be used to pay claims in the event that syndicates go bust, rose 34 percent to 1.95 billion pounds.

It released surplus reserves of 856 million pounds, up from 270 million in 2006.

Lloyd’s is renowned for providing all types of specialist insurance, and 75 syndicates are underwriting cover at the market this year.