Lloyd’s of London insurers face $4.5bn claims on hurricane disasters

Lloyd’s of London confirmed it had already paid out ‘significant amounts’ to cover claims following the recent hurricanes which hit Florida, Texas and the Caribbean.

The aftermath of hurricanes Irma and Harvey has left Lloyd’s potentially facing claims totaling $4.5billion.

In the last six months, Lloyd’s, which is the world’s biggest insurance market, saw its pre-tax profits fell by £24million from £1.46billion to £1.22billion. This excludes the impact of recent natural disasters.

Inga Beale, Lloyd’s chief executive, said: ‘Recent natural catastrophes around the world have underlined the importance of what we do as a sector and a market.

‘These are the times when we must act with speed and urgency, to help people, businesses and communities get back on their feet as quickly as possible.

We have been working hard on responding to claims and, in the case of storms Harvey and Irma, have already paid out significant amounts in Texas and Florida.’

Beale previously said insurers could be hit by a total of £150billion from the hurricanes.

The group’s gross written premium increased by 16 per cent to £18.9billion, despite ‘continuing pressure on pricing from excess capital and low interest rates.’

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The firm said its ratings among key rating agencies remained strong, with Fitch at AA- (very strong), Standard & Poor’s at A+ (strong) and A.M. Best at A (excellent).

Beale said: ‘These results highlight the continued strength of the Lloyd’s market, but they do reflect the challenging conditions that have shaped the sector over recent years.

‘Our focus on maintaining a strong underwriting discipline and concentrating on profitable lines of business is showing signs of success, but we cannot allow that focus to waver if we are to continue to ensure the Lloyd’s platform is the most attractive option for customers.’

Earlier this year, Lloyd’s announced it planned to open a subsidiary in Brussels in order to keep a presence in Europe after Britain leaves the EU.

The insurance market, which generates around 11 per cent of its business from the EU has taken decisive action and decided against a ‘wait and see approach’ to Brexit negotiations.

In its interim statement today, the group said: ‘This will present us with new opportunities to grow our EU business over the coming years.

‘It will be a fully operational, capitalised insurance company and Solvency II compliant. It will be regulated by and report directly to the Belgian regulator.’

The Brussels office is due to open in 2019.