Low interest rates and falling investment returns have hit profits at the Lloyd’s of London insurers Amlin and Hiscox.
Amlin saw its pre-tax profits tumble 20.6% to £258.7 million last year with investment returns down 26% to £118.5m.
In contrast, Hiscox’s profits fell 5.4% to £231.1 million.
Insurers have also been under pressure from flows of capital into the sector as investors like hedge funds look for new ways to make money.
This has hit prices across the Lloyd’s market and increased consolidation with companies like Catlin and Brit falling into foreign hands.
Robert Childs, Hiscox’s chairman, said: “In my opinion, the new sources of capital are here to stay.
“They have become accustomed to operating in our business, so I think they are unlikely to move on (as perhaps some hope they will) when rewards improve in other parts of the capital markets.
“Squeezed margins and consolidation have put pressure on old relationships.”
