Lloyd's to take $3.8bn hit from this year's natural disasters
14 May 2011
Lloyd's of London, the world's largest insurance market operator, said on Friday that losses from disasters in Japan, New Zealand and Australia this year would cost its member-insurers some $3.8 billion.
The Japanese earthquake and tsunami alone will result in net claims before tax of $1.95 billion, making it the fourth most expensive natural disaster in the market's history, behind hurricanes Katrina and Ike in the US, and the terrorist attacks in New York on 11 September 2001, it said.
Insurance premiums are rising following the series of costly natural disasters during the early months of 2011 in Japan, New Zealand and Australia, it added.
Lloyd's published the estimated losses after its 87 syndicates, which underwrite insurance at the market, submitted their maximum exposure to the three events.
But Lloyd's said the claims will not have a "material" impact on its capital and it does not expect any exposure to its central fund, the reserves kept for bailouts, either individually or collectively.
Lloyd's chief executive Richard Ward said, "The Lloyd's market is as well capitalised as it has ever been and, while claims from all three events could still evolve over time, the market's total exposure is well within the worst-case scenarios we model and prepare for."
In addition to Japan, Lloyd's members have estimated a cost of $1.2 billion from the earthquake in New Zealand in February and $650 million from the floods in Queensland, Australia, the month before. Lloyd's said that the claims were consistent with industry losses of $30 billion for Japan, $9 billion for New Zealand and $5 billion for Australia.