LONDON’S insurance market Lloyd’s paid out more than £2bn in global catastrophe claims in 2010, pushing its profit down 43 per cent to £2.2bn, it said yesterday.
It said the fall was to be expected in a year that saw net claims of £2.18bn and the third-highest level of catastrophe losses in 15 years apart from 2001’s 9/11 attacks and hurricane Katrina in 2005.
Lloyd’s chief executive Richard Ward said estimated losses relating to Japan’s earthquake and tsunami will only be released in May after it has received data from all its members on 20 April.
But finance director Luke Savage said Lloyd’s insurers had enough capital to withstand a $64bn (£40bn) Japanese quake loss – far above the $20-$30bn estimated cost of the disaster.
Ward also hit back at no-win-no-fee car crash claims and welcomed government plans to reform the sector after revealing a £520m loss on underwriting in its UK motor division.
“What we have seen in the motor businesses in Lloyd’s is just a microcosm for what is happening across the UK. The increase in claims has caught all insurers unaware,” he said. Lloyd’s, home to 52 UK insurers, said it paid claims worth $1.3bn from last March’s earthquake in Chile; $600m from the quake to hit New Zealand last September; and $275m from the Queensland floods in Australia last December.
It also paid out $386m from the destruction of the Deepwater Horizon rig in the Gulf of Mexico but said it believes claims may reach $600m over time.
Lloyd’s wrote £22.6bn of gross premiums across more than 200 territories, up 2.9 per cent on 2009. Its combined ratio – a key measure of profitability – rose to 93.3 per cent from 86.1 per cent in 2009. Numbers under 100 mean the firm is operating profitably.