Lloyd’s chairman shares outlook as market reports higher H1 profit

(Reuters) — Commercial insurance premiums may not yet be turning lower despite years of increases, Lloyd’s of London Chairman Bruce Carnegie-Brown told Reuters, as the market Thursday reported a 26% jump in first-half pretax profit.

Commercial insurers have coped in recent years with a pandemic, wars, inflation and rising losses from natural catastrophes by excluding some business and raising prices.

Insurance prices are starting to flatten, Mr. Carnegie-Brown said.

“Some people are calling the top of the market and thinking that prices will come down,” he said, adding however that “some of the insurance companies aren’t in great shape, so I don’t know how much flexibility they have over lowering prices.”

Lloyd’s’ pre-tax profit rose to £4.9 billion ($6.44 billion) as its members avoided riskier business.

Gross written premiums rose 6.5% to £30.6 billion, while the group’s combined ratio, a measure of underwriting profitability in which a level below 100% indicates a profit, strengthened to 83.7% from 85.2% in the year-earlier period.

Reinsurers meet next week for their annual conference in Monte Carlo, Monaco, to hammer out pricing deals with insurers for next year. Insurers then choose whether to pass any rate changes on to their business customers.

Fitch analyst Manuel Arrive said Thursday he expected a “moderate softening” in property catastrophe reinsurance rates at the key Jan. 1 renewal date.