Insurance market Lloyd’s of London has begun paying “significant amounts” to those affected by storms Harvey and Irma, and is estimating its total costs for the natural disasters to come in at around $4.5 billion (£3.3bn).
In a half-year report yesterday, the group said that it has paid out big figures in Texas and Florida, adding that it has been “working hard on responding to claims”.
Parts of the Caribbean and US have been devastated by the hurricanes, with insurers expected to stomach a £150bn hit.
Lloyd’s said: “Windstorms Harvey and Irma made landfall on the United States and the Caribbean towards the end of August and early September 2017 respectively.
“These events have caused significant damage in the states of Texas and Florida in the United States and to a number of islands in the Caribbean.
“It is currently too early to reliably estimate the financial impact of these loss events to the Lloyd’s market given the level of uncertainty at this stage of development. Our preliminary analysis indicates net claims, after reinsurance, to the Lloyd’s market in the region of $4.5bn.”
It added that losses linked to Hurricane Maria, which made landfall on a number of Caribbean islands this month, have not yet been quantified.
Lloyd’s made the announcement alongside its interim results, which do not take into account the recent storms.
Pre-tax profits slid from £1.46bn to £1.22bn in the six months to the end of June, but gross written premiums increased by 16 per cent to £18.9bn despite “continuing pressure on pricing from excess capital and low interest rates”.
Chief executive Inga Beale said: “These results highlight the continued strength of the Lloyd’s market, but they do reflect the challenging conditions that have shaped the sector over recent years.
“Our focus on maintaining a strong underwriting discipline and concentrating on profitable lines of business is showing signs of success, but we cannot allow that focus to waver if we are to continue to ensure the Lloyd’s platform is the most attractive option for customers.
“Whilst these results do not cover the current hurricane season in the Caribbean and US, 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.”
The insurance market’s combined ratio fell to 96.9 per cent from 98 per cent the year before. The investment return came in at 1.5 per cent, down from 1.8 per cent in June 2016.
Earlier this year, Lloyd’s of London confirmed plans to establish an EU subsidiary in Brussels following Brexit, moving around 100 of its 700 London staff in the process. Lloyd’s aims to start work at the Brussels office from January 2019.
One of the most venerable names in the City, Lloyd’s can trace its roots back to 1686 when it was founded by Edward Lloyd at his coffee house on Tower Street. In 2016, there were 99 syndicates.