Of the ?3.11 billion loss figure, ?1.98 billion ($2.8 billion) relates to Sept. 11 losses, said Andrew Moss, director of finance for Lloyd's, during a press conference here today to release the results.

"It goes without saying that 2001 was an exceptional year by any measure," said Nick Prettejohn, Lloyd's chief executive. "Sept. 11 was the industry's largest insured loss, and Sept. 11 was Lloyd's single largest insured loss as well."

Despite the loss in 2001, Lloyd's has demonstrated "great resilience," he said. "We have our largest ever capacity going into 2002 of ?12.2 billion [$17.1 billion] versus just over ?11 billion [$15.4 billion] for 2001," he said.

Since September, Lloyd's has transferred $5 billion of funds into its U.S. trust fund to meet regulatory requirements, and $900 million in claims relating to Sept. 11 have been paid, he said.

Mr. Prettejohn admitted that the market's loss record since its reconstruction and renewal program was completed in 1996 is not acceptable. That's why fundamental changes in the market are being initiated, he noted. (See "Lloyd's Proposes Radical Modernization" in NU, Jan. 21, page 9, with followup coverage on Jan. 28 and Feb. 11, both on page 23.)

The move to annual accounting is part of that initiative, so Lloyd's can easily be compared with its competitors, he said.

Lloyd's loss was large in absolute terms, he said in a statement, but he added that with a combined ratio of 140, the market had a comparable performance to other major property-casualty insurers on a global basis.

Lloyd's said that in the final quarter of 2001 and the first quarter of 2002, it is projected that premium income will increase by 62 percent compared with a year earlier, he said.

Rates are projected to rise by 60-to-90 percent in the aviation sector; 35-to-60 percent in the property reinsurance area; 25-to-250 percent in the marine area, 10-to-15 percent in motor coverage; 25-to-35 percent in personal accident, 10--to-50 percent in property insurance, and 20-to-50 percent in general liability, Lloyd's said.

During the press conference, Mr. Moss said that the increase in premium income suggests that 2002 will be a profitable year, "absent another very large and very extraordinary loss?"