The group said it had set aside the amount for customers affected by the conflict, notably for grounded aircraft, ships stuck in the Black Sea and disrupted exports of grain and agricultural products from Ukraine and Russia. Bruce Carnegie-Brown, the chairman, said Lloyd’s had calculated losses using the same methodology as for the Covid-19 pandemic, but only around 4% of claims for war losses had been received so far. The pandemic has cost the Lloyd’s market, which operates 76 companies, far more at £3.5 billion. In total, the war in Ukraine could cost the global insurance industry £10bn to £12bn, according to industry estimates. Lloyd’s worked with the UK government to implement sanctions imposed because of the war, including the cancellation of insurance cover for the Russian companies. At the same time, it is insuring ships carrying grain from Ukrainian ports under a U.N.-brokered deal in July, up to a limit of $500 million. “These grain exports go to emerging market countries and countries that are most vulnerable to famine as a result of food shortages. A number of them have docked in east Africa as we speak,” Carnegie-Brown told the Guardian. “These exports are made on ships that are trapped in Ukraine. The key issue will be whether people are willing to sail back to the Black Sea to get further grain exports and we haven’t reached that point yet… Time will tell but so far the results are good.” As the cost of living crisis worsens, the company will pay a one-off payment of £2,500 to around 1,000 employees earning less than £75,000 a year, 60% of its workforce, to help with rising energy and food bills. Despite a £1.1bn hit from the invasion of Ukraine as well as claims from floods in Australia and Europe, Lloyd’s improved its underwriting profits to £1.2bn in the first half of the year from 960 £m a year earlier. However, a £3.1bn investment loss caused by higher interest rates pushed Lloyd’s to a total pre-tax loss of £1.8bn in the first half, compared with a £1.4bn profit a year earlier. He noted that financial markets had a difficult first half of the year as global stocks fell sharply and bonds sold off as yields jumped as markets expected higher inflation. Most of the investment loss came from valuation losses in fixed income securities, but Lloyd’s said those losses would be reversed as the bonds mature over the next two years. John Neal, chief executive of Lloyd’s, said: “With political and economic uncertainty prevailing in society, it is more important than ever that insurers are ready to support. “The rise in interest rates, while causing an unrealized investment loss on paper in the half, will be good news for insurers in the longer term as asset yields strengthen in 2023 and beyond.” Lloyd’s third annual culture survey showed some progress towards its target of 35% of leadership roles being held by women by the end of 2023 – it’s now 30%, up from 29% last year. A third of new hires are from ethnic minorities at the company, while the rest of the market has yet to meet this target, where one in five are currently from ethnic minorities. Insurance brokers and agents have been slowly returning to the Richard Rogers-designed Lloyd’s building in the City of London since Covid restrictions were lifted. About 3,000 people come to do face-to-face business every week now, compared to 5,000 before the pandemic. They tended to go to the office on Tuesdays, Wednesdays and Thursdays, while “the market remains pretty quiet on Mondays and Fridays,” Carnegie-Brown said.
