Financial Results
Wednesday 7 April, 2004
1
Cautionary note on forward-looking statements
This presentation includes forward-looking statements. These statements are based on currently available information
and consistent accounting policies as applied at 31 December 2003. They reflect Lloyd’s current expectations,
projections and forecasts about future events and financial performance. All forward-looking statements address
matters that involve risks, uncertainties and assumptions. Based on a number of factors, actual results could vary
materially from those anticipated by the forward-looking statements. These factors include, but are not limited to, the
following:

Rates and terms and conditions of policies may vary from those anticipated.

Actual claims paid and the timing of such payments may vary from estimated claims and estimated timings of
payments, taking into account the preliminary nature of such estimates.

Claims and loss activity may be greater or more severe than anticipated, including as a result of natural or man-made
catastrophic events.

Competition on the basis of pricing, capacity, coverage terms or other factors may be greater than anticipated.

Reinsurance placed with third parties may not be fully recoverable, or may not be paid on a timely basis, or such
reinsurance from creditworthy reinsurers may not be available or may not be available on commercially attractive terms.

Developments in the financial and capital markets may adversely affect investments of capital and premiums, or the
availability of equity capital or debt.

Changes in legal, regulatory, tax or accounting environments in relevant countries may adversely affect (i) Lloyd’s ability
to offer its products or attract capital, (ii) claims experience, (iii) financial return, or (iv) competitiveness.

Economic contraction or other changes in general economic conditions could adversely affect (i) the market for
insurance generally or for certain products offered by Lloyd’s, or (ii) other factors relevant to Lloyd’s performance.
The foregoing list of factors is not comprehensive, and should be read in conjunction with other cautionary statements
that are included herein or elsewhere. Lloyd’s undertakes no obligation to update or revise any forward-looking
statement, whether as a result of new information, future developments or otherwise.
2
Agenda
 Introduction
Lord Levene
Chairman
 2003 Results
Nick Prettejohn
Chief Executive
 Questions
3
2003 Results - highlights
 Profit of £1,892m* for 2003 (£834m for 2002)
 Further reduction in combined ratio to 90.7%
(2002: 98.6%)
 Initial profit projection of £1,780m for 2003
underwriting year (3 year accounting basis)
 39% increase in central assets to £781m
 Net resources up 35% to £10.1bn
*Pro-forma annual accounting basis
4
Annual accounting results
£m
2002
2003
Net earned premiums
10,669
11, 711
+10%
Net incurred claims
(6,652)
(6,697)
+1%
Net operating expenses
(3,586)
(3,985)
+11%
(401)
(30)
-93%
Investment return
804
893
+11%
Profit on ordinary activities
834
1,892
+127%
Loss on exchange
*Pro-forma annual accounting basis
5
2003 Annual accounting results
Premiums
% increase
on 2002
12
11.0
9.8
10
8
6
4
2.5
2
1.4
0
Constant exchange rates
Gross written premium
*Pro-forma annual accounting basis
6
Net earned premium
2003 Annual accounting results
Outwards reinsurance premiums
% ceded
35
31.1
30
25.4
25
20
15
10
5
0
2002
*Pro-forma annual accounting basis
7
2003
2003 Annual accounting results
Premiums: on-going businesses
% increase
on 2002
30
26.2
25
20
15
10
8.7
5
0
Gross written premium
*Pro-forma annual accounting basis
8
Net earned premium
Annual accounting results
£m
2002
2003
Net earned premiums
10,669
11, 711
+10%
Net incurred claims
(6,652)
(6,697)
+1%
Net operating expenses
(3,586)
(3,985)
+11%
(401)
(30)
-93%
Investment return
804
893
+11%
Profit on ordinary activities
834
1,892
+127%
Loss on exchange
*Pro-forma annual accounting basis
9
2003 Annual accounting results
Net catastrophe losses
£m
3,000
2,663
2,500
2,000
1,500
1,000
642
500
445
408
272
178
250
206
87
142
0
1994
1995
Source: Syndicate quarterly returns
10
1996
1997
1998
1999
2000
2001
2002
2003
2003 Results – reserve strengthening
£m
Current accident year
2,437
Reserve strengthening
(545)
Profit on ordinary activities before tax
1,892
*Pro-forma annual accounting basis
11
Annual accounting results
£m
2002
2003
Net earned premiums
10,669
11, 711
+10%
Net incurred claims
(6,652)
(6,697)
+1%
Net operating expenses
(3,586)
(3,985)
+11%
(401)
(30)
-93%
Investment return
804
893
+11%
Profit on ordinary activities
834
1,892
+127%
Loss on exchange
*Pro-forma annual accounting basis
12
Annual accounting results
£m
2002
2003
Net earned premiums
10,669
11, 711
+10%
Net incurred claims
(6,652)
(6,697)
+1%
Net operating expenses
(3,586)
(3,985)
+11%
(401)
(30)
-93%
Investment return
804
893
+11%
Profit on ordinary activities
834
1,892
+127%
Loss on exchange
*Pro-forma annual accounting basis
13
Annual accounting results
£m
2002
2003
Net earned premiums
10,669
11, 711
+10%
Net incurred claims
(6,652)
(6,697)
+1%
Net operating expenses
(3,586)
(3,985)
+11%
(401)
(30)
-93%
Investment return
804
893
+11%
Profit on ordinary activities
834
1,892
+127%
Loss on exchange
*Pro-forma annual accounting basis
14
Lloyd's combined ratio
%
110
100
98.6
90.7
90
80
70
60
50
2002
*Pro-forma annual accounting basis
15
2003
Lloyd's: performance by class of business
2003 Calendar year combined ratios
%
120
110.4
110
100
93.6
89.4
90
93.0
89.7
89.3
83.4
80
70
60
50
Casualty
Property
Reinsurance
*Pro-forma annual accounting basis at syndicate level
16
Motor
Marine
Energy
Aviation
Lloyd's vs Industry 2003 Combined Ratios
%
130
121.3
120
113.3
107.5
110
100
98.6
101.4
100.7
101.2
European P/C & R/I
Industry (i)
US P/C Industry (ii)
US R/I Industry (iii)
90.7
90
80
70
60
50
Lloyd's*
2002
2003
Sources i) Company data, ii) Insurance Information Institute estimate, iii) Reinsurance Association of America
*Pro-forma annual accounting basis
17
Underwriting year result & projection
£m
2001 account result
2002 account projection
1,671
2003 account projection
1,780
* Three year accounting basis
18
(2,378)
Net incurred loss ratio development
1998-2003
%
100
90
80
70
60
50
40
30
20
10
0
0
1
2
3
4
5
6
7
8
Quarter
1998
1999
2000
2001
Source: Lloyd’s audited annual accounts
NB All ratio denominators are Q12 actual or estimated ultimate premiums for open years
19
2002
2003
Net incurred loss ratio development
1993-1997 vs 2002 & 2003
%
80
70
60
50
40
30
20
10
0
0
1
2
3
4
5
6
7
8
Quarter
1993
1994
1995
1996
1997
Source: Lloyd’s audited annual accounts
NB All ratio denominators are Q12 actual or estimated ultimate premiums for open years
20
2002
2003
Balance Sheet
£m
2002
2003
Cash & investments
24,512
27, 893
+14%
Reinsurers’ share of technical
provisions
13,693
11,180
-18%
Other assets
11,091
9,830
-11%
Total assets
49,296
48,903
-1%
Total liabilities
(41,787)
(38,758)
-7%
Net resources
7,509
10,145
+35%
21
Lloyd’s central assets
£m
Central Fund
Corporation of Lloyd’s
Total
22
711
+49%
70
-20%
781
+39%
Lloyd’s central assets
£m
1,000
781
800
563
600
400
363
200
0
2001
23
2002
2003
2003 central assets – Central Fund arbitration
£m
1,000

Net potential exposure
same as last year

Arbitration due later this
year

Lloyd’s position
unchanged
800
290
600
400
781
491
200
0
2003
24
2003
Central assets – post 9/11 target achieved
$1,398 @ USD 1.79
$1,188 @ 2001 exchange rates
£m
1,000
781
800
563
600
400
363
200
0
2001
25
2002
2003
No increase in capacity
2004 vs 2003
£bn
18
16
14
12
10
8
6
4
2
0
2004
2003
Capacity
Qualifying Quota Share
Source: 2003 final stamp capacity, 2004 first stamp capacity. QQS latest business plan estimates
26
Market conditions remain attractive
Premium rating index
2003
2002
2003
2004
Calendar year
combined ratios
Casualty
100
121
130
110.4
Property
100
103
98
89.4
Reinsurance
100
104
102
89.3
Motor
100
107
106
93.6
Marine
100
115
121
89.7
Energy
100
104
96
83.4
Aviation
100
98
94
93.0
*Pro-forma annual accounting basis
27
Industry fundamentals – the same one year on
External Influences
Capital Markets
Industry
Reserve
Strengthening
28
Lloyd’s Influences
Franchise
Implementation
UNDERWRITING
PROFIT
2003 – A year of continued progress
 Implementation of the Franchise
 Transition towards limited liability
 Move to annual accounting
 Progress on Business Process Reform
29
Summary –
Another year of progress and profit
 A year of continued progress against strategic objectives
 A year of strong financial results
 £1.9 billion profit, helped by low catastrophe losses
but after reserve strengthening
 Combined ratio of 90.7%, outperforming our
international peer group
 Substantial increase in balance sheet resources
(central assets up 39%, net resources up 35%)
 Market conditions attractive and fundamentals unchanged
 No room for complacency
*Pro-forma annual accounting basis
30
Financial Results
Wednesday 7 April, 2004
31