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04 April 2003

Lloyd's 2002 Financial Results
Lloyd's has announced a strong return to profitability with the publication of the Market's results for 2002:

- a profit of Ł834m on a pro-forma annually accounted basis
- a profit forecast of Ł1,484m on a three-year accounted basis

Lloyd's performance compares very favourably with that of its international competitors as reflected by the Market's combined ratio:

- Lloyd's: 98.6%
- European Reinsurers: 105.1% (Source: CSFB)
- US P&C: 108.3% (Source: Business Insurance)
- US Reinsurers: 121.3% (Source: RAA)

With record capacity for 2003 of Ł14.4 billion (before allowance for additional premium to be written via qualifying quota share reinsurance), Lloyd's is strongly positioned as improved trading conditions continue to be sustained following the significant upturn in the underwriting environment in 2002. Inreased rates have been supplemented by tighter terms and conditions, higher deductibles and tougher underwriting practices.

Lloyd's 'balance sheet' resources have been strengthened considerably - net resources for 2002 have increased by 85% as compared to 2001 and the Central Fund has grown by 70% over the same period.

Lloyd's has commenced arbitration proceedings in respect of the Central Fund insurance policy underwritten by Swiss Re and five other insurers. Lloyd's has a very strong case and is confident of success.

The Financial Services Authority and Lloyd's ratings agencies have received full briefings on the dispute. AM Best (A - Excellent) and Standard & Poor's (A - Strong) have today confirmed that Lloyd's ratings are not affected by the commencement of arbitration proceedings in respect of the Central Fund insurance policy.