2006: Lloyd’s of London, the oldest insurance market in the world, yesterday urged its members to start taking global warming more seriously, by increasing prices to avoid being “swept away” in a sea of future financial claims. Premiums will have to rise and some risks might even be classed as uninsurable due to greenhouse gases and rising sea levels, warned Lloyd’s in a report entitled Climate Change, Adapt or Bust. “Climate change is today’s problem not tomorrow’s. If we don’t take action now to understand the changing nature of our planet we will face extinction,” said Lloyd’s director, Rolf Tolle.
2008: Insurance business Lloyd’s of London reported another record annual profit today: £3.85bn in 2007, up 5% from the previous year’s figure of £3.66bn. However, it moaned that the outlook for 2008 was a lot more gloomy – apparently there just aren’t enough ships sinking, aeroplanes falling out of the sky or large geographical areas being devastated by floods. Doesn’t your heart just bleed? This lack of catastrophic natural disasters or man-made accidents is a double-edged sword for the venerable insurer. In the last two years, it’s allowed it to avoid the enormous pay-outs of previous years (as after Hurricane Katrina), allowing it to generate record profits. But the problem is that after a while, insurance premiums start coming down (by 5 to 20%, apparently) – which means Lloyd’s profit margins start shrinking too.
