Disasters push Lloyd's of London into red Lloyd's of London posted its first annual loss in six years after a succession of natural catastrophes pushed it £516m into the red in 2011. The insurance market also announced on Wednesday that it had given top executives salary increases of up to 20 per cent in 2012 as part of a pay overhaul that also cut their maximum potential bonuses. The £516m pre-tax loss compared with a £2.2bn profit in 2010. Lloyd's members received claims in 2011 arising from the earthquake and tsunami in Japan, earthquakes in New Zealand and floods in Thailand and Australia. The disasters cost the market £4.61bn, more than double the catastrophe claims of £2.12bn a year earlier, although a relatively mild Atlantic hurricane season was one small consolation. Although there have been fewer catastrophes in the first three months of 2012 compared with a year earlier, Lloyds cited the sinking of the Costa Concordia cruise ship in January as a negative factor. Richard Ward, chief executive, said 2012 would be challenging because of pricing pressure caused by an excess of capital in insurance and reinsurance markets, as well as the difficulty in getting a decent return on invested funds. "Market rates remain soft and it is clear there will be no major strengthening of the weak investment environment in the foreseeable future," he said. Following a review of executive pay, Mr Ward's salary was increased 20 per cent at the start of 2012 to £668,000, while his maximum potential bonus was reduced from 150 per cent of salary to 100 per cent. For 2011, he was paid £1.44m overall, including £556,000 of salary and a bonus of £752,000. This was down from £1.71m a year earlier. The salary of Tom Bolt, director of performance management, rose 18 per cent to £577,000 at the same time as his maximum bonus was reduced from 100 per cent of salary to 67 per cent. Luke Savage, finance director, received a 15 per cent salary increase to £518,000, while his maximum bonus fell from 75 per cent of salary to 50 per cent. Lloyd's said aggregate pay levels had been appropriate but the switch to more fixed pay was in keeping with the executives" supervisory role. Lloyd's is a society of members who underwrite insurance on their own account through syndicates. Its results are a pro forma guide to the aggregate performance of members rather than a single entity. Gross written premiums rose 4 per cent to £23.5bn in 2011, although the increase would have been closer to 6 per cent if exchange rate fluctuations had been stripped out.