The Most Annoying Sound In The World

Image source: Giphy

What's going on?

Lloyd’s of London may feel it’s got more in common with Dumb and Dumber than just its lead character’s name: the world’s largest insurance market revealed a first-half loss on Thursday that could spell big costs ahead for insurers and insured worldwide.

What does this mean?

Lloyd’s – also not to be confused with the British bank of the same name – is an odd fish in the insurance world. The historic marketplace’s 90 “syndicate members” insure people and businesses, including other insurance companies via “reinsurance”. Its broad span therefore makes it a good barometer for the insurance industry as a whole – and that barometer’s currently reading “high pressure”. Over the last six months, Lloyd’s made a $530 million loss before tax, largely due to $3 billion of coronavirus-related payouts in the period. What’s more, it expects to fork out another $3 billion throughout the rest of 2020.

Why should I care?

The bigger picture: So you’re telling me there’s a chance… 


Back in March, Lloyd’s estimated insurance companies around the world – excluding life insurers – would end up on the hook for more than $100 billion in coronavirus claims due to disruptions to travel, events, and trade. But they’re not taking it lying down: UK financial authorities are currently contesting insurers’ avowed lack of liability for certain pandemic-related claims which typically apply only in cases of physical damage. The outcome could lead to higher costs (or savings) for insurers everywhere…



Zooming in: Our pets’ heads are falling off!


The key measure of an insurance company’s profitability is its “combined ratio”. This shows losses and expenses as a percentage of revenue from premiums, revealing how good an insurer is at profitably selling policies. The Lloyd’s ratio was 110% in the last six months compared to 98.8% the same time last year, when the firm made a $3 million profit. Insurers trying to recoup their 2020 losses by charging more for protection could make your travel, health, business – and, yes, parakeet – insurance more expensive.

Originally posted as part of the Finimize daily email.

The top 2 financial news stories in 3 minutes. Join over one million Finimizers

Read next

Parallel Parker

Sign up to Finimize

Get the two most important global financial news stories each day. Sent at midnight UK time.

Get started with one email a day

The top financial news stories in 3 minutes.