Lloyd’s rebounds from disaster
LLOYD’S of London, the venerable insurance market, is likely to have cashed in on a relatively quiet spell for natural disasters.
The group was hit with almost £13 billion of claims last year, including £4.6bn related to disasters such as floods in Australia and Thailand, an earthquake in New Zealand and Japan’s devastating tsunami.
The unusually high number of major disasters tipped Lloyd’s, which is made up of 87 underwriting syndicates, to a £516 million loss for the whole year, with the first-half deficit hitting £697m.
Analysts said that pattern is not expected to have been repeated in the first six months of 2012.
However, the group has also been forced to contend with challenging investment conditions as fears over the Eurozone debt crisis and global economic growth rocked markets.
Chief executive Richard Ward previously said Lloyd’s was prepared for a collapse of the euro and had reduced its exposure to the troubled single currency. He warned that the market could have to take writedowns on its £58.9bn investment portfolio if the Eurozone collapses.
Last year was the second most expensive on record for insurers, though Lloyd’s met its own claims without any call on its central fund – its fund of last resort.
The group has shown in recent years that it is more than able to cope with major catastrophes, including American hurricanes.
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