SUPERSTORM Sandy has left members of the Lloyd’s of London insurance market with a bill of at least £286m, it was revealed yesterday.
The enormous storm swept through the Caribbean and north-eastern US at the end of October, hitting New York and leaving a trail of destruction in its wake. The resulting damage is expected to cost insurers up to $25bn (£15.4bn). Although much of the bill will be picked up by US insurers, Lloyd’s has still been left to pay some of the cost.
Bermuda-based Catlin, the biggest syndicate on the market, said yesterday that it expects to pay out at least $200m following the storm, although this estimate is subject to a “considerable degree of uncertainty” due to the size of the storm and the wide variety of damage it caused.
Shares in the FTSE 250 firm closed down 1.63 per cent on the news.
Fellow Lloyd’s insurer Hiscox said its losses will be in the region of £90m, while Novae said it would pay out $20-30m. This follows last week’s announcement that Beazley faces a $90m hit.
Joy Ferneyhough, an analyst at Espírito Santo Investment Bank, said insurers will be able to cope with the payouts given the “benign environment” for natural disaster claims in the first nine months of this year.
“We expect most companies to be just over catastrophe budget now for 2012 and as such Sandy turns what would have been an extraordinarily strong earnings year into a more average one,” she added.
US insurers AIG and Allstate have estimated their Sandy losses at $1.3bn and $1bn respectively, while Swiss Re, the world’s second-largest reinsurer, has said it expects to pay out $900m.
This year will still be an improvement on 2011, when earthquakes in Japan and New Zealand caused $100bn of damage and led to heavy losses across the industry.