The chief executive of Lloyd’s of London, the world’s biggest group of insurers, has warned that new technologies are not really helping the industry.
“I’m not sure technology is actually helping us predict the weather any better to assist insurance,” Inga Beale, chief executive of Lloyd’s of London, told CNBC on Thursday.
Lloyd’s reported £1.67 billion ($2.7 billion) of profits for the first half of 2014 on Thursday, a 21 percent increase in profit from the same period in 2013.
The profit hike for the insurers came in a relatively benign year for natural disasters, after a couple of years where storms like Hurricane Sandy caused huge damage.
“What we’re really focused on is under-insurance around the world, particularly in catastrophic areas,” Beale said.
There is currently a global insurance shortfall of $168 billion, according to Lloyd’s, which means that some governments end up having to pay out more when disaster strikes.
Lloyd’s is “looking much more at the developing markets” at the moment, according to Beale.
The group of insurers’ combined ratio (a closely-watched measure of how much profit it is making, which is better the further it is below 100 percent) for the half-year was 88.2 percent, compared to 86.9 percent for the same period a year earlier.
This was because of increased competition to deliver lower premiums, Beale said, adding that there is now more outside interest in the industry.
“Low investment returns and low interest rates mean that the insurance industry is becoming attractive for capital providers to invest in,” she said.