The specialist Lloyd’s of London insurance and reinsurance marketplace expects to experience net claims, after reinsurance, of roughly $4.5 billion (£3.37bn) as a result of the impacts of hurricanes Harvey and Irma.
Hurricanes Harvey and Irma battered parts of the U.S. and the Caribbean in late August and early September, bringing intense rainfall, strong winds, and subsequent widespread damage.
Insurance and reinsurance companies are starting to better understand their exposure to the events, and have now been providing loss estimates for the storms, that are expected to be realised in third-quarter 2017 results.
While stressing uncertainty around the reliability of estimates from both events, the Lloyd’s market has said that preliminary analysis suggests the market will experience net claims, after reinsurance protection, of around $4.5 billion from the storms.
Regarding hurricane Maria, which severely impacted parts of the Caribbean shortly after Harvey and Irma, Lloyd’s says the degree of uncertainty remains extremely high, and has therefore not provided a preliminary loss estimate for this event.
However, recent analysis from Keefe, Bruyette & Woods (KBW) suggests that Lloyd’s could have a market share of 8% or higher, which would make it one of the most exposed to hurricane Maria losses in Puerto Rico.
In the Lloyd’s first-half 2017 financial report, where the market reported a decline in profit but increased volumes, Inga Beale, Chief Executive Officer (CEO), commented on the events; “Recent natural catastrophes around the world have underlined the importance of what we do as a sector and a market. These are the times when we must act with speed and urgency, to help people, businesses and communities get back on their feet as quickly as possible.
“We have been working hard on responding to claims and, in the case of storms Harvey and Irma, have already paid out significant amounts in Texas and Florida. We continue to work closely with brokers, coverholders, and customers to make sure they are receiving the support and the service that the Lloyd’s reputation has been founded on.”
During the first-half of 2017 the specialist insurance and reinsurance market reported profit of £1.22 billion ($1.58bn), a decline of 17% from the £1.46 billion recorded for the same period in 2016.
“Whilst these results do not cover the current hurricane season in the Caribbean and United States, the market is assessing claims and starting to make payments that will help local communities and businesses get back on their feet as quickly as possible. It is our ability to respond quickly and effectively in times like these that differentiates the Lloyd’s market and is ultimately what we are here to do,” said Beale.
