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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Blueberg Day Baker podcast. Good morning, It's Thursday,

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Speaker 2: the nineteenth of March. I'm Caroline hepkea in London and

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Speaker 2: I'm Stephen Caroline Brussels.

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Speaker 1: Coming up today, Iran strikes the world's largest LNG export plant,

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Speaker 1: as President Trump' scrambles to de escalate and European gas

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Speaker 1: prices surge.

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Speaker 2: UK unemployment hold steady as the Bank of England gets

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Speaker 2: set to join the FED in holding rates as inflation

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Speaker 2: fears mount.

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Speaker 1: Plus, the CEO of Lloyd's of London joins us in

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Speaker 1: studio to discuss their results and how the insurance marketplace

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Speaker 1: is navigating events in the Middle East.

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Speaker 3: Let's start with a roundup of our top stories.

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Speaker 1: European gas prices jumped by as much as thirty five

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Speaker 1: percent at the open, as oil prices are also sharply higher.

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Speaker 1: Following attacks on some of the world's most important energy facilities.

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Speaker 1: Iran struck Katar's rassler Fan Industrial City Complex, the world's

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Speaker 1: largest liquefied natural gas export plant. Authority said the facility

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Speaker 1: suffered extensive damage, while a second strike led to a fire.

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Speaker 1: The Katari LNG plant was hit after Israel carried out

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Speaker 1: a strike on Iran's giant South Pars gas field. Tehran

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Speaker 1: warned of imminent retaliation against energy plants in the region.

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Speaker 1: Here's been Burg energy reporter Dan mertav Now we're not talking.

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Speaker 4: About okay, once the strait is open, we'll get things

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Speaker 4: rolling again in a matter of weeks. When we're talking

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Speaker 4: damage to these facilities, I mean we're talking now potentially

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Speaker 4: a matter of months that production could be offline. And

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Speaker 4: you know, we won't know the details for a little

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Speaker 4: while here, but traders are going to start pricing in

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Speaker 4: that risk of longer and larger supply outages, and that's

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Speaker 4: going to be a big problem for the global economy.

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Speaker 1: Dan Martau was speaking as President Trump tried to distance

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Speaker 1: the US from the Israeli attack, saying on social media

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Speaker 1: that Washington knew nothing about the strikes on the gas field.

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Speaker 1: He vowed there would be no further attacks by Israel

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Speaker 1: on the Iranian site, but he also so warned that

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Speaker 1: any further retaliation by Tehran against Katara would force the

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Speaker 1: US to quote massively blow up the entirety of the

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Speaker 1: South Paris field.

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Speaker 2: Iran has launched fresh waves of missiles and drones at

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Speaker 2: the UAE, Saudi Arabia and Kuwait after confirming the assassination

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Speaker 2: of its security chief Ali Larijani. It also struck Tel

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Speaker 2: Aviv as Israel and the US maintained their bombardment of Iran.

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Speaker 2: Julia Rocknefard is an assistant professor of Iranian and Middle

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Speaker 2: Eastern Studies at Nottingham University.

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Speaker 5: The United States will have to stay in order to

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Speaker 5: protect Israel. So it's a kind of a trap that

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Speaker 5: the American administration that went into this war willingly find

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Speaker 5: itself in. And sometimes when you look at it, it

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Speaker 5: looks like it's such a strike the American prestige because

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Speaker 5: the American president found himself trapped and criticized within his

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Speaker 5: own administration, and now it proves to be almost impossible.

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Speaker 3: To pull out.

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Speaker 2: Julia Rocknfard speaking there as, Israel has also stepped up

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Speaker 2: its offensive in Lebanon, where it's fighting Hezbola, which is

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Speaker 2: backed by Tehran. Is Really strikes in the country have

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Speaker 2: killed more than nine hundred people, according to the Lebanese government.

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Speaker 2: That brings the war's death toll to more than four thousand.

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Speaker 2: According to data from a range of government and non

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Speaker 2: government agencies.

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Speaker 1: Federal Reserve charge your own pals. As it's too soon

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Speaker 1: to measure the effects of the surgeon oil prices on

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Speaker 1: the US economy, he says, the center back one cut

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Speaker 1: rates again until inflation cools. FED officials left rates unchanged yesterday,

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Speaker 1: but they still expect one cut this year. Here's what

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Speaker 1: jerown pal said about the effects of the war on inflation.

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Speaker 6: Near term measures of inflation expectations have risen in recent weeks,

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Speaker 6: likely reflecting the substantial rise in oil prices caused by

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Speaker 6: the supply disruptions in the Middle East. Most measures of

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Speaker 6: longer term expectations remain consistent with our two percent inflation goal.

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Speaker 1: FED officials raised their outlook for inflation this year from

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Speaker 1: two point four to two point seven per in a

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Speaker 1: more surprising move. Powell also commented on his tenure and

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Speaker 1: the ongoing investigation into the FED by the Department of Justice.

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Speaker 1: He says he won't be resigning as a member of

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Speaker 1: the fed's Board of Governors for now.

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Speaker 6: I have no intention of leaving the board until the

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Speaker 6: investigation is well and truly over with transparency and finality,

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Speaker 6: and I would refer you to the statement that was

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Speaker 6: in the Fed's brief that you all have seen and

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Speaker 6: I want to rea any more for you on that.

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Speaker 1: Powell's term as chair expires in May, but he could

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Speaker 1: remain on the rate setting Federal Open Market Committee as

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Speaker 1: a governor. The FED chief also said that he would

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Speaker 1: continue to serve as chair if his successor is not

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Speaker 1: confirmed by the end of his term.

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Speaker 2: Meanwhile, the Bank of Japan also kept rates on hold

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Speaker 2: as uncertainty surrounding the Middle East conflict clouds the economic outlook.

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Speaker 2: The BOJ leftist benchmark lending rate at zero point seventy

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Speaker 2: five percent, matching the expectations of economists surveyed by Bloomberg.

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Speaker 2: The central bank voted eight to one for that hold

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Speaker 2: and added the Middle East to its list of risk factors,

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Speaker 2: but without altering its inflation outlook. The move suggests that

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Speaker 2: it still sees a potential path to raise rates in

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Speaker 2: the coming months.

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Speaker 1: UK unemployment heald to Teddy in February, with the jobless

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Speaker 1: rate unchanged at five point two percent. The slightly better

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Speaker 1: than expected figure suggests the British jobs market may be

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Speaker 1: improving after employers rained in hiring and ramped up redundancies

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Speaker 1: last year. New data showed average weekly earnings excluding bonus

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Speaker 1: as rose less than economists that have forecast between November

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Speaker 1: and January, increasing by three point eight percent versus an

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Speaker 1: estimate of four percent.

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Speaker 2: The Europein Central Bank and the Bank of England will

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Speaker 2: both announce their rate decisions later. Bloomberg analysis suggests that

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Speaker 2: the Bank of England will adopt a more hawkish tone

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Speaker 2: than most expect as it models the UK's exposure to

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Speaker 2: high energy prices. Our chief UK economist Dan Hansen says,

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Speaker 2: that's a major shift from the bank's last meeting in February.

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Speaker 7: You essentially had a central bank calling victory on inflation

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Speaker 7: and signaling that there were probably one, maybe two more

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Speaker 7: rate cuts coming over the course of the year and

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Speaker 7: getting down to a neutral level. Things have changed dramatically

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Speaker 7: and in a similar way to the trade off facing

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Speaker 7: the ECB inflation all else equal. If we look at

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Speaker 7: market pricing, inflation is going to be quite a bit

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Speaker 7: higher than the Bank of England thought.

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Speaker 2: Dan Hansen was speaking as markets are close to pricing

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Speaker 2: in a twenty five basis point hike from the Bank

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Speaker 2: of England by the end of the year. The European

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Speaker 2: Central Bank is also expected to keep interest rates unchanged today.

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Speaker 2: ECB President Christina god has vowed not to rush into

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Speaker 2: a decision, but has also promised to spare Europeans from

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Speaker 2: the same inflation increases as four years ago.

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Speaker 1: HSBC is considering deep job cuts over the coming year

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Speaker 1: as part of a bet on AI. Bloomberg has learned

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Speaker 1: that jar j Al hendrie the CEO is the talks

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Speaker 1: about cutting ten percent of the bank's workforce. James Wilcock

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Speaker 1: has the story, l Hendriy is on a mission to

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Speaker 1: streamline Europe's largest bank. He's already cut thousands of jobs.

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Speaker 1: Now Bloomberg understands ABC's CEO is in talks to shrink

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Speaker 1: its back office headcount by as much as twenty thousand people.

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Speaker 1: The bank declined to comment on the story, but it's

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Speaker 1: one of the first signs about how AI could radically

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Speaker 1: reshape Wall Street. Bloomberg Intelligence forecast as many as two

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Speaker 1: hundred thousand positions in global finance could cease to exist

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Speaker 1: in the next three to five years as banks looked

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Speaker 1: to robots instead. In London, James Wilcock Bloomberg Radio.

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Speaker 2: And those are our top stories for you this morning.

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Speaker 2: So we are closely looking at central bank decisions the

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Speaker 2: FED and the Bank Japan on Holberg on the ECB,

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Speaker 2: the Bank of England to come swat pricing shows that

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Speaker 2: the traders are leaning towards two Bank of England interest

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Speaker 2: rate hikes this year, which is very interesting after the

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Speaker 2: stronger than expected employment figures out only about an hour

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Speaker 2: and ten minutes ago. All of this, our central banks

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Speaker 2: watched the jump the surge in energy prices that we've

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Speaker 2: seen see a cross baring Creed futures which are now

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Speaker 2: up by five point nine percent one hundred and thirteen

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Speaker 2: dollars sixty seven and European natural gas prices up now

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Speaker 2: almost twenty four percent this morning. Also European stocks now

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Speaker 2: down by one point two percent, so accelerating declinents forty

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Speaker 2: one hundred down by one point two percent. The euro

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Speaker 2: is slightly softer at one fourteen forty eight is against

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Speaker 2: a slightly stronger dollar. And you also do see yields

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Speaker 2: surging across Europe, so friendshields up five basis points, Germany

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Speaker 2: yields up three basis points, the UK guilt yields up

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Speaker 2: eight basis points this morning on ten year notes. So

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Speaker 2: that is what we're watching in terms of energy and

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Speaker 2: bond markets today.

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Speaker 1: In a moment, we'll bring you the latest on those

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Speaker 1: attacks on energy facilities in the Middle East that have

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Speaker 1: sent energy prices skyrocketing, plus what to expect from today's

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Speaker 1: Bank of England rate decision. And the CEO of Lloyd's

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Speaker 1: of London, Patrick Tynan, joins us in studio to discuss

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Speaker 1: their results and the spiraling cost of maritime insurance. Put

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Speaker 1: in the story that we've been reading this morning about

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Speaker 1: the crews on board the ships stuck in the Persian Gulf,

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Speaker 1: forty thousand sailors facing a crossfire of drones and electronic warfare,

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Speaker 1: bloombergs and speaking to some of those aboard those ships,

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Speaker 1: the hundreds of ships that are trapped in that area

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Speaker 1: due to the effect of closure of the straight or

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Speaker 1: four moves, and their testimony is fascinating.

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Speaker 3: Yeah.

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Speaker 2: Look, at least two fairers are known to have died

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Speaker 2: during attacks on their vessels. You've got three crew members

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Speaker 2: on a tie flagged vessel that are thought to be

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Speaker 2: trapped in the ship's engine room, and many many others.

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Speaker 2: Mariners have been speaking to Bloomberg on mobile phones via

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Speaker 2: messaging apps. The picture just is incredibly difficult. They've been

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Speaker 2: talking a lot of them on condition of anonymity to

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Speaker 2: try to speak freely. The crew members do get paid extra,

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Speaker 2: there is extra remuneration for facing these sorts of dangers,

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Speaker 2: but many of them say that that just feels inadequate.

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Speaker 2: And the problem is Stephen that actually, if those crews

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Speaker 2: want to leave, they can't choose to leave. They need

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Speaker 2: to be replaced on board the vessels, and people in

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Speaker 2: the industry say very clearly that that is extremely difficult

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Speaker 2: in practical terms.

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Speaker 1: Yeah, and in terms of the conditions on board as well.

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Speaker 1: One sailor spoke to Bloomberg said that the crew are

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Speaker 1: surviving on sugar and rice rationing in place on boards.

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Speaker 1: They're also short of fresh water because the systems that

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Speaker 1: provide fresh water on these boats don't work as effectively

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Speaker 1: when the essentially they aren't moving. And you know, we're

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Speaker 1: talking about of course they're sitting there with the explosions

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Speaker 1: happening around them, and they talk about the fact that

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Speaker 1: you know, many of them aren't sleeping because through the

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Speaker 1: night is when a lot of these attacks take place

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Speaker 1: as well, and the anxiety being felt on the ships.

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Speaker 1: I mean this is a side of this story that

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Speaker 1: we haven't heard so much about. Remember, these are the

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Speaker 1: people that are responsible for keeping the global economy turning

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Speaker 1: and have done so through previous crises as well, and

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Speaker 1: it is an insight into the conditions that they're experiencing

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Speaker 1: and of course with no real end in sight.

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Speaker 2: Yeah. Absolutely, Slinda have a bit of reporting the blockade

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Speaker 2: leaving stranded crews, braving missiles and signal jamming. We will

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Speaker 2: put a link to it in our podcast show notes.

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Speaker 2: You can find it on the Bloomberg website and on

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Speaker 2: the terminal.

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Speaker 1: Well, let's bringing up today with the latest developments in

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Speaker 1: the Middle East after those strikes on the gas refining

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Speaker 1: plant in Katar, but also the South pars field in

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Speaker 1: Iran as well. Let's bring in our Horizon's Middle Eastern

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Speaker 1: Africa anchor from Bloomberg Television, Jermana Versacchi Jamana. We're looking

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Speaker 1: at a big energy price reaction to those latest strikes.

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Speaker 1: What do we know about how much damage was done

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Speaker 1: and what it means for energy markets?

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Speaker 8: Yeah, well, I saw the open for European gas markets

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Speaker 8: was something like twenty seven percent higher on the open,

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Speaker 8: which isn't surprising given how much of an escalation that

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Speaker 8: we saw in the situation overnight now one after Israel

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Speaker 8: conducted those airstrikes on the South Pars gas field in Iran,

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Speaker 8: Iran swiftly responded saying that they will retaliate but on

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Speaker 8: Gulf states. And indeed the retaliation came through overnight a

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Speaker 8: major escalation because they managed to successfully target And the

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Speaker 8: reason I say successfully is because they had in the

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Speaker 8: early days of the war also targeted that Raslafan facility,

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Speaker 8: that Key LNG export facility, and Kutar, but at the

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Speaker 8: time there was no communic case suggesting that it had

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Speaker 8: caused extensive damage. This time was different, and what we

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Speaker 8: understand is that kut was able to intercept four missiles.

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Speaker 3: One missile broke through.

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Speaker 8: And did cause quote unquote extensive damage to those facilities.

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Speaker 3: We don't know exactly the.

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Speaker 8: Extent of the damage, but I think what the market

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Speaker 8: is pricing in for now is not necessarily just physical disruption,

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Speaker 8: but physical destruction in the sense that it is very

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Speaker 8: likely now that we're going to see this cut our

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Speaker 8: LNG supply being taken off the market, not just for

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Speaker 8: a short amount of time, but for an extensive period,

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Speaker 8: depending on how long it's going to take to repair

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Speaker 8: the damages. And of course this is one of the

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Speaker 8: key exporters, is the main exporter for many economies around

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Speaker 8: the world, accounting for about twenty percent of LNG supply.

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Speaker 8: The line's share of it is directed towards Asia, and

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Speaker 8: so it makes sense that the markets are now accounting

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Speaker 8: for not just a protracted conflict, but also damage being

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Speaker 8: sustained at these upstream facilities.

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Speaker 5: Yeah.

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Speaker 2: Absolutely, there was also Abu Dhabi shutting a significant gas

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Speaker 2: facility in Abshan as well. So as you say, maybe

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Speaker 2: this is moving to actual physical impact or infrastructure. President

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Speaker 2: John though is talking about trying to bring energy costs down.

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Speaker 2: Are US and Israeli war goals diverging?

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Speaker 3: Well.

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Speaker 8: I think there's been a lot of press and reports

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Speaker 8: and analysis that's been written overnight as to whether or

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Speaker 8: not the US were privy to information on whether the

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Speaker 8: Israeli ear strikes on these gaspar fields were going to

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Speaker 8: go ahead. President Trump this morning put out a post

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Speaker 8: up on truth social saying that they were not aware

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Speaker 8: that they were going to do it, and then also

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Speaker 8: said that Israel will not attack those fields again, but

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Speaker 8: that if Iran were to continue striking cut out, then

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Speaker 8: the US would have to get involved. So some people

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Speaker 8: are reading this as a de escalatory message, But I

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Speaker 8: think what is very clear from that post is we've

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Speaker 8: certainly entered into a new dimension.

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Speaker 3: And from the.

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Speaker 8: Gulf State's perspective, it's also become very clear that even

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Speaker 8: though this was a war that they wanted to avoid

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Speaker 8: and they did not want to get involved in and

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Speaker 8: they didn't start, they're paying the very very heavy consequences

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Speaker 8: of what.

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Speaker 3: Has been happening.

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Speaker 8: So with the US, they've perhaps been less clear about

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Speaker 8: what the exact war objectives are, whether it's regime changed

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Speaker 8: or complete the capitation of the regime or just taking

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Speaker 8: out Iran's full offensive and defensive capabilities. From the intensity

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Speaker 8: they attacked, though the joint military operations that are ongoing

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Speaker 8: between you US and Israel, there doesn't appear to be

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Speaker 8: signs of things letting up. And one of the big

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Speaker 8: questions that people are asking is at what point is

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Speaker 8: there going to be some sort of a restraining influence

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Speaker 8: on this war and have we got there given the

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Speaker 8: strikes on energy infrastructure in the Goals States overnight.

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Speaker 1: Okay, Jamana, thank you very much for bringing us up

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Speaker 1: to date on the latest. That's your amun of Versearch.

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Speaker 1: There are horizons at Middle Eastern Africa anchor for pubric television.

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Speaker 1: Stay with us. More from Bloomberg Daybreak Europe coming up

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Speaker 1: after this.

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Speaker 2: So the Bank of England is expected to skip an

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Speaker 2: interest to rate cut today, a move that markets want.

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Speaker 2: Ors In this certainty, economists expect a stronger consensus in

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Speaker 2: favor of holding rates steady, but creeping into markets is

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Speaker 2: the idea of rate hikes for the UK. We've also

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Speaker 2: had the UK labor market data out faring a bit

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Speaker 2: better than have been expected. Let's bring in our chief

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Speaker 2: UK economist Dan Hanson to give us a preview in

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Speaker 2: what is actually a rapidly changing situation given the escal

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Speaker 2: in the Middle East. How does the Bank of England

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Speaker 2: think about this and will we get a lot of

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Speaker 2: information out of them, as we did with the Fed

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Speaker 2: yesterday that talk quite openly about you know, their understanding

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Speaker 2: of the impact on all prices. You know that they

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Speaker 2: couldn't say anything yet was the Fed's view.

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Speaker 7: Yeah, I mean I think you'll get something pretty similar

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Speaker 7: from the Bank because, as you say, it's moving so

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Speaker 7: quickly that you know they would have when the Bank

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Speaker 7: of England meets, they meet a few days before the

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Speaker 7: actual decision gets published, and they would have met yesterday

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Speaker 7: as well and finalized their decision. You know, it's possible

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Speaker 7: they'd have got together this morning to consider what's going on. Nonetheless,

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Speaker 7: I think for the Bank right now, the key message

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Speaker 7: is to say, you know, we're aware of this inflation

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Speaker 7: shock and we are now moving to a world where

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Speaker 7: interest rate cuts are probably off the table in the

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Speaker 7: very near term. You know, if we go back two

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Speaker 7: or three weeks, everyone expected them to cut rates at

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Speaker 7: this meeting. That is obviously not going to happen today.

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Speaker 7: One difference with the Fed and also the ECB is

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Speaker 7: that the Bank is not going to be putting out forecasts,

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Speaker 7: so we're only going to be getting minutes. What's important

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Speaker 7: there is, as I mentioned, is the guidance, but also

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Speaker 7: the what the individual members say about the shock and

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Speaker 7: how they view it. You know, I think one going

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Speaker 7: to your point about the labor market data this morning,

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Speaker 7: that was very interesting because there are some signs of stabilization.

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Speaker 7: So I think, you know, taking that as a given,

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Speaker 7: I think the Bank will think there's a little bit

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Speaker 7: more space to focus on focus on inflation and be

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Speaker 7: less worried about the labor market. It's loose, but there

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Speaker 7: are signs that it's stabilizing, and I think that's an

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Speaker 7: important and important factor today.

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Speaker 1: What about questions around the vote split as well, And

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Speaker 1: I suppose that the indications that we might guess from

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Speaker 1: from what I suppose you say will be limited detail.

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Speaker 7: Yeah, I mean on the vote split, I think it's

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Speaker 7: pretty likely that Swatty doing Roan Alan Taylor will still

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Speaker 7: vote for cuts. I mean, if they don't, that would

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Speaker 7: be really really hawkish. I mean, I think that would

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Speaker 7: really you get a real sell off if you saw that.

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Speaker 7: I think for the rest of the members of the NPC,

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Speaker 7: the ones to watch for me at least are it's

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Speaker 7: always Andrew Bailey. He's been the swing voter on the

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Speaker 7: committee and how he's perceiving how things have evolved over

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Speaker 7: the past few weeks, that'll be really important. I think

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Speaker 7: Catherine Mann will be one to watch as well, because

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Speaker 7: she looked like she was close to voting for a

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Speaker 7: rake cast or getting closer to it. But I think,

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Speaker 7: you know, historically she's been quite hawkish, and I think

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Speaker 7: this news will tip her back in a hawkish direction,

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Speaker 7: but I think Bailey is the one to watch when

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Speaker 7: looking at the individual members and looking at those individual

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Speaker 7: member paragraphs.

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Speaker 2: Okay, Dan, I want to get your view on how

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Speaker 2: inflationary this is going to be. I mean, we are

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Speaker 2: tracking these big jumps in Brent and natural gas prices.

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Speaker 2: The r A C in the UK is the kind

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Speaker 2: of gold standard in terms of understanding how swiftly petrol

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Speaker 2: prices out of the pump are going up, and they

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Speaker 2: come out once a week and the most recent was

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Speaker 2: pointing to how petrol's increased ten p per liter, So

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Speaker 2: it is kind of adding about eleven quid to people

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Speaker 2: topping up their refilling their cars. How do you think

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Speaker 2: about the translation and the increase in inflation because of

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Speaker 2: the energy price surge.

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Speaker 7: Yeah, so I think there are two strands to it.

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Speaker 7: So the first strand, as you've mentioned, there is petrol prices,

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Speaker 7: and the movements in all prices show up very quickly

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Speaker 7: at the price of the pump. And we did some

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Speaker 7: work earlier this week. We think March CPI inflation will

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Speaker 7: probably be point three percentage point, perhaps even point four

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Speaker 7: percentage point given what's happened today, higher than we thought

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Speaker 7: it would be. Prior to the war, so we thought

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Speaker 7: inflation would be two point nine percent in March. We

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Speaker 7: now think it's going to be three point three percent,

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Speaker 7: perhaps so above three percent. Bank of England targets two percent.

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Speaker 7: The second rung of it is gas prices in the UK.

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Speaker 7: That takes a lot bit longer to come through because

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Speaker 7: of the way off GEM, which is the energy or

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Speaker 7: energy regulator here sets prices. We think that that you know,

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Speaker 7: the July the next time that price gets reset will

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Speaker 7: be July, and you know, we could get as much

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Speaker 7: as zero point five zero point six percentage point. I

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Speaker 7: haven't admittedly I haven't run the numbers on the latest

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Speaker 7: jump this morning, but it could. You know, there's upside

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Speaker 7: risks to that. So taking it all together, you know,

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Speaker 7: about half a percentage point from all, about half a

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Speaker 7: percentage point from utility prices by the end of the year,

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Speaker 7: Inflation around three percent, not around two percent pre war.

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Speaker 7: That's that's the sort of picture we're looking at at

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Speaker 7: the moment, and obviously a very different picture than the

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Speaker 7: one the banking them painted back in February, where I

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Speaker 7: say they were painting a picture of inflation being beaten.

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Speaker 7: They were going to get back to two percent and

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Speaker 7: they could cut interest rates were in a very different

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Speaker 7: world now.

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Speaker 2: Okay, Don, thank you so much for that analysis and

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Speaker 2: on the inflation shot that could come to pass here

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Speaker 2: in the UK. That is our chief UK economist, Dan Hanson.

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Speaker 1: We've been watching the European leaders arriving for the EU

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Speaker 1: summit in Brussels this morning as well, and some comments

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Speaker 1: on the situation in the Middle East as well, Robyette

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Speaker 1: and the new Dutch Prime minister talking about it being

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Speaker 1: too volatile to start a horrormon'z straight mission. That's something

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Speaker 1: that we know the US President has been lobbying for

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Speaker 1: as well. Lots of talk about the reform of that

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Speaker 1: emission's trading system for the EU as well and what

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Speaker 1: that would mean to bring down energy prices as well.

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Speaker 1: The Finnish Prime Minister just speaking out in support of

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Speaker 1: that ETS policy for the moment. And the other big

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Speaker 1: issue being watched here in Brussels is the support plan

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Speaker 1: for Ukraine. We've just heard from the Hungarian Prime Minister,

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Speaker 1: Victor Orban, the person who was blocking that ninety billion package.

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Speaker 1: He says they won't support any decision to give money

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Speaker 1: to Ukraine until Hungary gets the oil through the DRUGA

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Speaker 1: pipeline which runs through Ukraine as well. That is the

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Speaker 1: latest that we're getting out of those meetings as leaders

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Speaker 1: arrive in Brussels. The insurance marketplace, Lloyd's of London has

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Speaker 1: just reported it's fully results would show a ten percent

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Speaker 1: increase in profits to ten point six billion pounds. This

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Speaker 1: is the Iron War has also caused turmoil and the

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Speaker 1: insurance sector with the cost of ship insurance spiraling. We've

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Speaker 1: been discussing the results and the situation in the Middle

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Speaker 1: East with the CEO of Lloyd's of London, Patrick Tiernan.

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Speaker 9: The results today strong results, so that ten point six

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Speaker 9: billion pounds of profit ten percent increase, it puts us

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Speaker 9: in a good position as we as we look forward,

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Speaker 9: as you rightly say, in complex and volatile conditions. I

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Speaker 9: think what's really important today is to focus also on

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Speaker 9: the strength of the balance sheet we have. We're reporting

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Speaker 9: very strong capital, increasing capital and very strong capital ratios,

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Speaker 9: and I think it's very important to focus on that

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Speaker 9: strength of balance sheet, that's solidity, that capital because as

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Speaker 9: we look forward into more challenging times, but also as

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Speaker 9: we think about setting our course for a new strategy,

441
00:22:55,240 --> 00:22:59,800
Speaker 9: we build it on that very strong, solid balance sheet.

442
00:23:00,040 --> 00:23:02,359
Speaker 1: Talk about one of the challenges that your business is facing,

443
00:23:02,400 --> 00:23:04,960
Speaker 1: and that is the events in the Middle East. How

444
00:23:05,000 --> 00:23:08,040
Speaker 1: has the war and Iran up ended your business.

445
00:23:07,960 --> 00:23:10,440
Speaker 9: Morning, Stephen. So, I think from our perspective, what's really

446
00:23:10,480 --> 00:23:15,119
Speaker 9: important when we come into these volatile times is to

447
00:23:15,240 --> 00:23:18,240
Speaker 9: ensure that the market continues to trade. So the focus

448
00:23:18,280 --> 00:23:22,560
Speaker 9: from Lloyd's of London has been ensuring that the companies

449
00:23:22,600 --> 00:23:25,400
Speaker 9: that are within our market have our support and can

450
00:23:25,480 --> 00:23:28,680
Speaker 9: continue to trade and have done so since the twenty

451
00:23:28,680 --> 00:23:31,760
Speaker 9: eighth of February. It's also pretty important to ensure that

452
00:23:31,800 --> 00:23:35,920
Speaker 9: we work with international partners, so both in the UK

453
00:23:36,480 --> 00:23:38,919
Speaker 9: and across the world, to ensure that we're focused on

454
00:23:38,960 --> 00:23:41,560
Speaker 9: the solutions that are needed going forward. But it does

455
00:23:41,600 --> 00:23:45,880
Speaker 9: come back to making sure we have that solidity that

456
00:23:45,920 --> 00:23:49,480
Speaker 9: people can know that we have the expertise and the

457
00:23:49,560 --> 00:23:53,680
Speaker 9: history of actually trading through and trading successfully through such

458
00:23:53,680 --> 00:23:59,240
Speaker 9: difficult times. Well, this is an unfolding crisis. I mean,

459
00:23:59,240 --> 00:24:02,320
Speaker 9: it's the headlines everywhere. It's to be honest, it's what

460
00:24:02,359 --> 00:24:04,960
Speaker 9: I think about first thing in the morning, the safety

461
00:24:04,960 --> 00:24:09,320
Speaker 9: of my own colleagues, but also the security situation. We

462
00:24:09,480 --> 00:24:12,720
Speaker 9: have a wealth of expertise within Lloyd's of London, within

463
00:24:12,760 --> 00:24:16,639
Speaker 9: the London market that has been exposed to crisis of

464
00:24:17,200 --> 00:24:21,680
Speaker 9: this scale before, most recently the invasion of Ukraine, prior

465
00:24:21,720 --> 00:24:25,960
Speaker 9: to that, around the in the at the Horn of Africa.

466
00:24:26,080 --> 00:24:28,439
Speaker 9: So bringing that expertise to bear and actually sort of

467
00:24:28,480 --> 00:24:31,040
Speaker 9: making sure that Lloyd's is a great conduit for the

468
00:24:31,040 --> 00:24:34,000
Speaker 9: information to allow solutions to happen in real time is

469
00:24:34,080 --> 00:24:34,640
Speaker 9: very important.

470
00:24:34,720 --> 00:24:38,160
Speaker 2: Okay, Well, solutions is an important one because President Chomp

471
00:24:38,240 --> 00:24:41,159
Speaker 2: has been talking about that. The idea of you know,

472
00:24:41,320 --> 00:24:45,760
Speaker 2: trying to ensure at a reasonable price ships, that is

473
00:24:45,800 --> 00:24:50,960
Speaker 2: his idea. But in terms of the nuts and bolts, obviously,

474
00:24:51,000 --> 00:24:54,120
Speaker 2: maritime insurance is the bedrock of Lloyd's of London, has

475
00:24:54,119 --> 00:24:59,440
Speaker 2: been for decades, if not centuries, but maritime insurers withdrew

476
00:24:59,680 --> 00:25:02,400
Speaker 2: war risk coverage in the early days of the conflict.

477
00:25:02,480 --> 00:25:05,520
Speaker 2: What is the situation now in terms of what is available?

478
00:25:05,560 --> 00:25:08,240
Speaker 2: I notice that you've been very pointed at Lloyd's and

479
00:25:08,320 --> 00:25:11,840
Speaker 2: saying that the market is open, But it seems quite binary.

480
00:25:12,280 --> 00:25:15,120
Speaker 2: You know, either there are exclusions or it's very very

481
00:25:15,160 --> 00:25:17,400
Speaker 2: expensive to get coverage because of the war.

482
00:25:18,000 --> 00:25:22,840
Speaker 9: So the way maritime and maritime war risk works in

483
00:25:22,880 --> 00:25:25,879
Speaker 9: the insurance world is that there is dynamic pricing and

484
00:25:25,880 --> 00:25:28,920
Speaker 9: as the risk changes, the price changes, and that's pretty

485
00:25:28,960 --> 00:25:33,000
Speaker 9: well understood about within the industry itself. I think as

486
00:25:33,080 --> 00:25:38,040
Speaker 9: we look and see the certain points where you have

487
00:25:39,280 --> 00:25:43,560
Speaker 9: difficulties in terms of setting the term setting the risk

488
00:25:43,600 --> 00:25:49,159
Speaker 9: because there is there isn't perfect information. That's solutions that

489
00:25:49,200 --> 00:25:51,640
Speaker 9: you talk about. We have a history of actually coming

490
00:25:51,720 --> 00:25:55,040
Speaker 9: up with these solutions, both within the industry itself and

491
00:25:55,080 --> 00:25:59,879
Speaker 9: then combining with governments and other authorities. And the history

492
00:26:00,119 --> 00:26:02,960
Speaker 9: we have in there is really important. So we have

493
00:26:03,200 --> 00:26:06,639
Speaker 9: within the UK pool re for terrorism, flood re for

494
00:26:07,720 --> 00:26:10,840
Speaker 9: flood risk, the same in the US Tree of for Terrorism,

495
00:26:10,920 --> 00:26:15,320
Speaker 9: and they come together by all of the parties, smart people,

496
00:26:15,520 --> 00:26:18,520
Speaker 9: smart capital working together to find those solutions. And that's important.

497
00:26:18,720 --> 00:26:21,639
Speaker 2: President Trump is not a great respector of history or

498
00:26:21,720 --> 00:26:25,679
Speaker 2: precedent or what has happened in the past. The US

499
00:26:25,960 --> 00:26:30,720
Speaker 2: is talking about providing insurance at a very reasonable price,

500
00:26:31,000 --> 00:26:34,879
Speaker 2: which is surely competition for Lloyd's. This idea of a

501
00:26:34,920 --> 00:26:40,080
Speaker 2: twenty billion dollar reinsurance program to revive shipping through the

502
00:26:40,119 --> 00:26:42,800
Speaker 2: Strait of Hormuz, what do you make of that?

503
00:26:43,880 --> 00:26:46,600
Speaker 9: So I think one of the important things when you

504
00:26:46,720 --> 00:26:49,320
Speaker 9: have the expertise and when you have the history of that.

505
00:26:49,440 --> 00:26:53,760
Speaker 9: Lloyd's has is that we maintain our discretion when we're

506
00:26:54,040 --> 00:26:57,719
Speaker 9: talking to international partners, so we continue to be involved

507
00:26:57,720 --> 00:27:03,439
Speaker 9: in conversations. I think there's place for solutions across the

508
00:27:03,480 --> 00:27:06,840
Speaker 9: piece here, So I don't think it's in competition. I

509
00:27:06,840 --> 00:27:09,040
Speaker 9: think it's it can be complementary, and I think there's

510
00:27:09,440 --> 00:27:12,880
Speaker 9: that we continue to talk to the right people with discretion.

511
00:27:13,440 --> 00:27:17,879
Speaker 2: As the situation on folds is Lloyd's possibly involved in

512
00:27:17,960 --> 00:27:20,880
Speaker 2: that kind of would it have access to that kind

513
00:27:20,960 --> 00:27:23,800
Speaker 2: of insurance or would it be focused on US players.

514
00:27:23,880 --> 00:27:27,879
Speaker 9: So I think that the DFCS is bringing forward the

515
00:27:29,960 --> 00:27:33,000
Speaker 9: details of its program over time. If they haven't made

516
00:27:33,000 --> 00:27:35,800
Speaker 9: it all public yet, so I think we will. It's

517
00:27:35,880 --> 00:27:39,360
Speaker 9: best way to see what details emerge. But I think

518
00:27:39,359 --> 00:27:44,159
Speaker 9: at the same time, the Lloyd's market, the wider London

519
00:27:44,359 --> 00:27:48,280
Speaker 9: marine market is continuing to offer quotes, is continuing to

520
00:27:49,400 --> 00:27:52,879
Speaker 9: be there, and actually there's some very deep relationships that

521
00:27:53,160 --> 00:27:57,040
Speaker 9: between insurers, their brokers, their clients that go back a

522
00:27:57,080 --> 00:28:01,440
Speaker 9: long way, and those relationships continue to hold firm through

523
00:28:01,440 --> 00:28:01,959
Speaker 9: this period.

524
00:28:03,119 --> 00:28:06,880
Speaker 1: Prices though have jumped dramatically for those insurance policies as well,

525
00:28:06,920 --> 00:28:10,480
Speaker 1: Are they at prohibitive levels? How different are the prices

526
00:28:10,520 --> 00:28:13,360
Speaker 1: for that sort of insurance versus before this conflict.

527
00:28:13,400 --> 00:28:15,280
Speaker 9: So, Steve, I think there's there's three elements in this.

528
00:28:15,400 --> 00:28:19,240
Speaker 9: I think there is the element of safety and security,

529
00:28:19,640 --> 00:28:23,359
Speaker 9: which ships captains and their crews make the decision whether

530
00:28:23,359 --> 00:28:29,040
Speaker 9: they want to transit. There's also the the issue of

531
00:28:29,480 --> 00:28:33,320
Speaker 9: whether the ships that are actually in place, it's not

532
00:28:33,400 --> 00:28:36,840
Speaker 9: all about ships transitting through the straight or foremoves. And

533
00:28:36,880 --> 00:28:41,600
Speaker 9: then there's all of the other elements beyond maritime, beyond shipping, aviation,

534
00:28:42,680 --> 00:28:46,280
Speaker 9: political violence, terrorism, there's a there's a very broad range

535
00:28:46,360 --> 00:28:49,040
Speaker 9: cyber as well. There's very broad range of insurance classes

536
00:28:49,280 --> 00:28:54,120
Speaker 9: that are involved in situations like this, and the market

537
00:28:54,160 --> 00:28:58,240
Speaker 9: does continue to to offer the covers. There is dynamic

538
00:28:58,320 --> 00:29:02,400
Speaker 9: pricing in certain sectors. In other sectors it's annual pricing.

539
00:29:02,720 --> 00:29:07,440
Speaker 9: So it's difficult to to make a comment on pricing

540
00:29:07,800 --> 00:29:11,680
Speaker 9: in one area. That's in the wider perspective.

541
00:29:13,440 --> 00:29:17,480
Speaker 3: In terms of I suppose how I mean.

542
00:29:17,600 --> 00:29:20,680
Speaker 2: The other conversations are also with the Chancellor here in

543
00:29:20,720 --> 00:29:22,960
Speaker 2: the UK or the government here in the UK, and

544
00:29:23,320 --> 00:29:25,640
Speaker 2: I note that the chance has talked about insurance products

545
00:29:25,680 --> 00:29:30,000
Speaker 2: also at right prices. So I mean there is a

546
00:29:30,000 --> 00:29:35,080
Speaker 2: lot of focus on kind of cost and insurability. Are

547
00:29:35,080 --> 00:29:38,880
Speaker 2: you expecting or how are you starting to think about

548
00:29:39,720 --> 00:29:45,040
Speaker 2: pricing for potential losses in the Gulf because this could

549
00:29:45,120 --> 00:29:47,040
Speaker 2: be a year of significant losses.

550
00:29:47,080 --> 00:29:49,920
Speaker 3: How do you think about it all? A question in Patrick?

551
00:29:50,040 --> 00:29:54,520
Speaker 9: Yeah, So at Lloyd's we have, because we've been doing

552
00:29:54,520 --> 00:29:57,320
Speaker 9: this for three hundred and thirty seven years, we have

553
00:29:58,640 --> 00:30:02,160
Speaker 9: our processes that we that we run to actually understand

554
00:30:02,240 --> 00:30:05,400
Speaker 9: the exposure and understand the potential losses. But it's worth

555
00:30:05,480 --> 00:30:08,480
Speaker 9: it's worth mentioning that it's it's important to allow the

556
00:30:09,120 --> 00:30:13,800
Speaker 9: firms who are actually trading to to actually do the

557
00:30:13,840 --> 00:30:16,840
Speaker 9: work that they need to do first. So Lloyd's runs

558
00:30:16,920 --> 00:30:22,040
Speaker 9: its Major Event Response Group, we look at the exposures

559
00:30:22,200 --> 00:30:25,880
Speaker 9: that we keep within our suite of realistic disaster scenario

560
00:30:25,960 --> 00:30:28,280
Speaker 9: so we have a handle on the exposures, and then

561
00:30:28,800 --> 00:30:32,800
Speaker 9: later on in it's in early May, we'll get our

562
00:30:32,840 --> 00:30:36,840
Speaker 9: first returns of what the market losses and exposures are

563
00:30:37,000 --> 00:30:38,880
Speaker 9: and we continue in that in that round. And we've

564
00:30:38,920 --> 00:30:40,440
Speaker 9: been doing this for quite a long time and it

565
00:30:40,480 --> 00:30:44,840
Speaker 9: works pretty well. So I think from our perspective that

566
00:30:44,880 --> 00:30:49,720
Speaker 9: when you talk about the the Chancellor and the government's

567
00:30:49,760 --> 00:30:53,479
Speaker 9: involvement in this, I think we are pretty buoyed by

568
00:30:53,520 --> 00:30:57,720
Speaker 9: the fact that the current the current government is very

569
00:30:57,720 --> 00:31:02,600
Speaker 9: supportive of insurance and reinsurance as sector. What our job

570
00:31:02,640 --> 00:31:04,000
Speaker 9: is to do is to make sure that we are

571
00:31:04,040 --> 00:31:09,080
Speaker 9: there for whatever crises or whatever complexity or volatility comes next.

572
00:31:09,400 --> 00:31:13,640
Speaker 9: And that is about having a very strong balance sheet.

573
00:31:13,720 --> 00:31:18,520
Speaker 9: It's about performing from a results perspective, and so you

574
00:31:18,600 --> 00:31:22,240
Speaker 9: mentioned at at the top of the hour that you know,

575
00:31:22,560 --> 00:31:26,800
Speaker 9: we've been profitable for the last three years. You know

576
00:31:26,840 --> 00:31:30,760
Speaker 9: we're producing returns of over twenty percent for three years.

577
00:31:31,800 --> 00:31:35,720
Speaker 9: But it's really important to actually drive that profitability in

578
00:31:35,840 --> 00:31:40,400
Speaker 9: the in times where you can build a balance sheets,

579
00:31:40,400 --> 00:31:42,520
Speaker 9: you can be there for the tougher years ahead.

580
00:31:43,760 --> 00:31:46,520
Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

581
00:31:46,560 --> 00:31:49,600
Speaker 1: stories making news from London to Wall Street and beyond.

582
00:31:49,960 --> 00:31:53,160
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583
00:31:53,280 --> 00:31:56,080
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584
00:31:56,120 --> 00:31:59,160
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585
00:31:59,200 --> 00:32:01,920
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586
00:32:01,960 --> 00:32:04,720
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587
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588
00:32:09,680 --> 00:32:11,000
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589
00:32:10,960 --> 00:32:13,600
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590
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591
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