Lloyd’s losses from Thailand reach £1.4bn
LLOYD’S of London has estimated its net claims from last year’s Thai floods will hit $2.22bn (£1.4bn), the third biggest loss in the market’s history.
The initial estimate is based on a projected worldwide cost to the insurance industry of $15bn–20bn and could change, but Lloyd’s is financially strong enough to cope according to chief executive Richard Ward.
“The Lloyd’s market is as well capitalised as it has ever been,” he said in a statement. “While claims from Thailand could still evolve over time, paying these claims is within the normal course of business for Lloyd’s.”
The floods, Thailand’s worst in 50 years, began last July and inundated large swathes of the country before finally subsiding in December.
Estimates of the insurance hit, initially put at about $10bn, have risen steadily as receding flood waters allow loss adjusters to gauge the damage more accurately.
The cost to insurers has also been inflated by a rash of business interruption claims after the floods disabled factories operated by major Japanese and US companies, triggering a shortage of components in the car and electronics industries.
The floods will rank as Lloyd’s third-biggest loss in absolute terms, surpassed only by Hurricane Katrina and the September 11 attacks.
Although the market does not detail how individual members are affected, many insurers have already announced a loss for 2011. One syndicate, Tokio Marine 1880, has already announced a $700m loss – almost a third of the Lloyd’s total.
The insurance industry had a dreadful 2011, suffering from floods in Australia and earthquakes in New Zealand and Japan.