Lloyd’s has reported a loss-before-tax of £887m for the year ended 31 December 2020, a sharp drop from profits of £2.5bn it reported the year prior.
The figure has been attributed largely to £3.4bn worth of net Covid-19 losses, which added 13.3% to the market’s combined operating ratio of 110.3%.
Moreover, catastrophe claims of £2.5bn represented a “busy natural catastrophe season” for the insurance and reinsurance marketplace.
John Neal, CEO at Lloyd’s, said: “While 2020 will forever be remembered as the ‘year of Covid-19’, the market has suffered threats from two other fronts: the first has been the uncertainty and turmoil driven by Brexit; the second being a significant increase in the number of natural catastrophe events.
“Notwithstanding these challenges we have made strong progress against our three strategic priorities of performance, digitalisation and culture.”
The market’s gross written premium represented a 1.2% year-on-year decline from £35.9bn to £35.5bn.
While the market paid out £21.4bn of gross claims during 2020, it said that net resources have not been impacted, rising from £30.6bn to £33.9bn.
Bruce Carnegie-Brown, chairman at Lloyd’s, said: “2020 has been a year like no other, with the impacts of Covid-19 having devastating consequences for businesses, communities and the global economy.
“Despite the challenges that the pandemic has presented, Lloyd’s has shown that it can withstand the effects of an unexpected and unprecedented disaster, whilst working with governments and organisations around the world to identify how we can learn from the past year to reduce the impact of potential future systemic risks.”