Lloyd’s, the world’s leading specialist insurance market, announced today its provisional loss estimate for Hurricanes Gustav and Ike.
In line with analyst’s estimates of an aggregate $20-25 billion industry loss, it is expected that Lloyd’s will face net claims of $2.34 billion/£1.3 billion. This covers on and offshore claims across both windstorms.
The Lloyd’s market is stress tested, through a series of Realistic Disaster Scenarios, to withstand significant natural and man-made catastrophes and these claims lie well within the outcomes of those stress tests.
Based on current estimates there will be a negligible impact on Lloyd's capital and no Central Fund exposure.
Lloyd’s CEO Richard Ward said:
“While industry losses from Hurricanes Gustav and Ike are likely to exceed initial forecasts, the claims to Lloyd's will be manageable and in the normal course of business. These exposures are in line with expectations and reflect our strong competitive position in the lines of business affected. The market is well positioned to respond to these claims and our strength continues to be underpinned by the effective risk management techniques in place across the market, our strongest ever Central Fund and stable ratings."
“Clearly these hurricanes have had a significant impact on the coastal and inland communities of the Southern US states and our priority remains assessing and settling claims as quickly as possible to help rebuild the area."
Lloyd’s wrote to all active managing agents asking for an assessment of the financial impact on syndicates. The provisional estimate is based on initial analysis of those assessments. Managing agents have drawn on the limited information they have to date in terms of actual claim notifications, supplemented by a thorough analysis of loss potential from policies in the affected region.
It will not be possible, for some time, to have a precise view of the ultimate insured loss as the full extent of the damage is still unknown and the loss is ongoing.
Notes to Editors:
1. The estimated claims of $2,340m have been translated into sterling at 1.80, the rate prevailing at the time of the two windstorms.
For further information, please contact:
Louise Shield
Tel: +44 (0)20 7327 5793 Fax: +44 (0)20 7327 5229 Email:
louise.shield@lloyds.com
Bart Nash
Tel: +44 (0)20 7327 6272 Fax: +44 (0)20 7327 5229 Email:
bart.nash@lloyds.com
For urgent out of hours media calls Tel: +44 (0)7659 597 825
Find out more about Lloyd's
Lloyd's is the world's leading specialist insurance market. Lloyd's underwriting capacity at 1 January 2008 is £15.95 billion which will be underwritten through 75 syndicates (including SPS and RITC syndicates), managed by 46 managing agents and supported by 176 brokers. It is the world's third largest non-life reinsurer, and is the second largest surplus lines insurer in the US.
Lloyd's is regulated by the Financial Service Authority.
