Lloyd’s of London reported pre-tax profit of £1.4 billion (US$1.9 billion) for the first half of 2021 compared to a £400 million (US$550.8 million) loss during H1 2020.

The market’s profit was driven by a “substantially improved” underwriting result of £1 billion ($1.4 billion), compared to an underwriting loss of £1.3 billion ($1.8 billion) in H1 2020.

Lloyd’s combined ratio of 92.2% was described as a “solid improvement” over H1 2020 when it reported a combined ratio of 110.4%. (A combined ratio below 100% indicates an underwriting profit).

The market has paid €2.2 billion ($3.04 billion) in COVID-19 claims, which represents 80% of the notified validated gross claims, according to Burkhard Keese, Lloyd’s CFO, during a media briefing to discuss the results. “The majority of the losses are first party property and event cancellation.”

During H1, Lloyd’s paid £9.4 billion ($12.9 billion) for overall claims.

Gross written premiums increased to £20.5 billion, (US$28.2 billion), compared to £20.0 billion ($27.5 billion) in H1 2020.

The growth in GWP was attributed to an increase in premium rates, high customer retention and new growth for the first time in four years.

During H1, premium rates increased by 9.9%, continuing the trend of 15 consecutive quarters of positive rate movement.

Improvements to the combined ratio were driven by notable reductions to both the attritional loss ratio and the expense ratio, said Lloyd’s.

An attritional loss ratio of 50.5% (H1 2020: 52.6%), is a 2.1 percentage point reduction from the ratio reported for the first six months of 2020.

The expense ratio of 35.8% (H1 2020: 37.7%) is a 1.9 percentage point improvement, and 3.7 percentage points improvement since 2017, said Lloyd’s, noting that the reduction in operating expenses remains a focus of its digital transformation program.

Lloyd’s said it maintains strong capital and solvency positions, with net resources increasing by £2.6 billion ($3.6 billion) to £36.5 billion ($50.3 billion), with central solvency and market solvency ratios of 218% and 170%, respectively. (Full-year 2020: 209% and 147%).

“Lloyd’s has successfully repositioned the market for sustainable, profitable growth as evidenced in this strong set of financial results,” said John Neal, Lloyd’s CEO, in a statement.

“I am encouraged to see that market performance has improved as a result of our ongoing remediation efforts. This, as well as our exceptionally strong balance sheet, brings Lloyd’s performance in line with our global peer group,” he added.

“Alongside performance, we are making great strides on all our strategic priorities which focus on improving the culture in the market, the Future at Lloyd’s digital transformation, and sustainability, climate and inclusion which underpin our purpose,” he said.