This year has been the second most expensive year ever for insurers due to an onslaught of natural disasters.
Lloyd’s of London’s 88 underwriting syndicates recorded a loss of £697 million during the first six months of the year. Earthquakes and tsunamis in Japan and New Zealand, among other locations, have been held largely to blame for the drop in profits.
The Japanese earthquake and subsequent tsunami has been the fourth largest event to impact the London-based market, with predicted claims of £1.2 billion. Meanwhile, the earthquake in New Zealand is expected to cause claims of £860 million and the floods in Australia are predicted to result in claims worth £200 million.
Chairman Lord Levene remarked that 2011 has been “one of the most challenging years on record for the insurance industry”. However, he added that the industry is prepared to handle the financial burden: “Lloyd’s ability to pay billions in claims to help these communities rebuild is unquestioned and the fact that we have managed to do so without any call on our central capital reserves is testament to the market’s exposure management.”
