Lloyd's of London reviews costs after swinging to 2 billion pounds loss

Reuters

Reuters

Following one of the costliest years for natural catastrophes in the past decade, Lloyd's, the specialist insurance and reinsurance market, today announced an aggregated market loss of £2bn for 2017.

After a number of "relatively benign catastrophe years", the frequency and scale of the disasters that struck around the world in the second half of 2017 cost the Lloyd's market £4.5 billion in major claims - more than double the previous year.

Hurricanes Harvey, Irma and Maria, along with an quake in Mexico, wildfires in California, monsoon flooding in Bangladesh and a mudslide in Colombia, cost the Lloyd's market £4.5bn in claims, more than double the previous year when it paid out £2.1bn.

Chairman Bruce Carnegie-Brown said Lloyd's had to date paid more than 50% of claims resulting from Harvey, Irma and Maria and is in the process of paying the rest.

"Our plans for 2018 are focused very much on closing the performance gap, which is both an underwriting issue but also focuses on the cost structures in the market".

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It was nearly brought to its knees by a scandal in the 1990s due to asbestos-related claims, which wiped out many of its individual investors, known as "names". "As a result the market is embracing new ways of working".

Lloyd's members include listed insurers Beazley and Hiscox.

Lloyd's of London Chief Executive Officer Inga Beale said insurance contracts across Europe will remain at risk unless there's an agreement on how they should be treated in post-Brexit Europe.

Beazley suffered a 43 percent drop in 2017 pretax profit, it reported last month, while Hiscox's profit dropped more than 90 percent.

The market experienced an exceptionally hard year in 2017, driven by challenging market conditions and a significant impact from natural catastrophes.

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