London: The Lloyd’s of London insurance market will this week report a half-year loss of £1.5 billion ($2.37 billion) after absorbing a record surge in natural catastrophe claims, according to an estimate from audit firm Mazars.
The projected loss, which compares with a £628 million profit a year earlier, is based on first-half results unveiled over the last two months by publicly quoted insurers operating in the Lloyd’s market, Mazars said.
Many insurers have reported steep losses over the first six months of the year after an unprecedented run of natural disasters, led by the 11 March Japanese earthquake and tsunami, drove a record surge in claims.
This year already ranks as the second most destructive on record for catastrophe losses after 2005, with insurers absorbing $70 billion in claims in the first six months alone, according to Swiss Re, the world’s No.2 reinsurer.
Lloyd’s, which traces its origins back 323 years to a London coffee house where merchants met to insure ships, said in May that it expected to take a $3.8 billion hit from floods and earthquakes in the first quarter.
Rising claims expenses and weak investment returns have squeezed insurers’ profits and fuelled hopes that a three-year decline in insurance prices, blamed on intense competition between well-capitalised players, could soon be reversed.
However, insurers and reinsurers gathered at the industry’s annual get-together in Monte Carlo last week said they expected prices to be broadly flat when customers renew their policies on 1 January.
Last month, Amlin, the biggest listed insurer operating at Lloyd’s, sank to a first-half loss of £192.3 million, while rivals Catlin and Hiscox unveiled deficits of $201 million and £85.6 million respectively.
Lloyd’s of London reports its half-year results on Wednesday.