Global insurance losses from the COVID-19 pandemic will be higher this year than the $107 billion Lloyd’s of London had previously estimated, its Chairman Bruce Carnegie-Brown said on Wednesday.
Carnegie-Brown told the Reuters Events Future of Insurance USA conference that pandemic-induced losses will be on a par with 2017, when three Atlantic hurricanes contributed to a catastrophe bill of $144 billion, the highest on record according to Swiss Re.
Lloyd’s, which in March shut its underwriting room for the first time since World War II due to a UK government lockdown, said Lloyd’s firms were facing claims from 16 different business lines.
“Unlike many events, a pandemic is everywhere at the same time,” Carnegie-Brown said, adding that the outbreak had extended longer than expected.
The 330-year-old Lloyd’s operates a commercial insurance marketplace, insuring anything from oil rigs to footballers’ legs. It has said it will pay 2.4 billion pounds ($3.2 billion) in pandemic-related claims for the first six months of 2020.
Lloyd’s has proposed a “Black Swan” reinsurance scheme to governments globally to ensure better cover during circumstances such as the pandemic and other disturbances to business, but Carnegie-Brown said it was hard to get government attention on the topic so far.
“The challenge for governments of course is that they are very short-term focused… (it is) very difficult for them to lift their heads above the parapet and think about the future,” Carnegie-Brown said.
Cyber exposure remained the biggest risk faced by insurers, he added, echoing comments made earlier this week by insurance broker and consulting firm Marsh & McLennan.
“As a world, we need to look at our resilience to cyber risk exposures.”
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