Insurance market Lloyd’s is set to swing to a £2bn loss, triggered by a surge in claims on business interruption policies, according to fresh analysis.
Research from Insurance DataLab shows the London market nursed losses that were £1.6bn higher than 2019’s figure last year.
Lloyd’s abysmal performance last year was driven by a poor performance in the pecuniary loss market. The business line registered a £656.5m underwriting loss in 2020, down sharply from a profit £96.7m in 2019.
Insurance premiums sold at the market have jumped more than 50 per cent in each quarter since the onset of the Covid crisis, according to Insurance DataLab.
Matt Scott, co-founder of Insurance DataLab, said: “The Lloyd’s market has been hit hard by the Covid-19 pandemic, with business interruption and other pecuniary loss claims more than quadrupling over the last 12 months.”
“The sector has already pushed through price increases, particularly towards the end of 2020, but more will be needed to offset the losses already experienced by the market to date.”
“Financial pressures will continue to affect businesses as the world’s economies continue to emerge from the pandemic, and insurers must brace themselves for further failures among its customer base, which will only add further downward pressure on an already shrinking premium base.”