Lloyd’s has announced that its provisional loss estimates for Hurricanes Gustav and Ike will be approximately £1.3 billion ($2.34 billion). The estimate covers both on and offshore claims from both storms, and is based on “analysts’ estimates of an aggregate $20-$25 billion industry loss,” said Lloyd’s.
That figure is significantly higher than the $10 to $16 billion overall estimates that have been previously given.
Lloyd’s noted that its exposures are “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 commented: “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 followed its usual cautious approach to assessing major losses in calculating its estimates for Gustav and Ike. The bulletin noted that it contacted “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.”
Source: Lloyd’s – www.lloyds.com
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