The insurance giant will pay out between $3 billion and $4.3bn (£2.5bn to £3.5bn) to cover its customers around the world, it revealed.
But it also warned that losses could rise further if the lockdown continues into another quarter, and added that the crisis was likely to become much more expensive than the hurricanes and 9/11.
“Lloyd’s believes that once the scale and complexity of the social and economic impact of Covid-19 is fully understood, the overall cost to the global insurance non-life industry is likely to be far in excess of those historical events,” the London-based insurance market said.
The hurricanes and 9/11 were both geographically contained events, while Covid-19 has hit the entire planet, Lloyd’s added.
Chief executive John Neal said that the insurers are facing one of their biggest challenges in history.
“The global insurance industry is paying out on a very wide range of policies to support businesses and people affected by Covid-19,” he said. “The Lloyd’s market alone is currently expected to pay claims amounting to some $4.3bn, making it one of the market’s largest pay-outs ever.
“What makes Covid-19 unique is not just the devastating continuing human and social impact, but also the economic shock. Taking all those factors together will challenge the industry as never before, but we will keep focused on supporting our customers and continuing to pay claims over the weeks and months ahead.”
He added: “Alongside making record pay outs, we have been turning our attention to what more we can do to support business and society through this incredibly difficult time.
“In addition to our £15 million package of charitable donations, we have set aside £15m in seed capital to explore how the industry can create or house structures which support economic recovery and mitigate against future events of this magnitude.”
About 15 per cent of the payout is expected to go to UK customers. European customers will get around 7 per cent, those classed as being in the “US and worldwide” will be paid 58 per cent, and the rest of the world will get 10 per cent of the payouts. The remaining percentage is classified as “other”.
Three years ago some of the most devastating hurricanes in history ripped through the Caribbean. At the time, Lloyd’s paid out $4.8bn. After 9/11 it paid out $4.7bn. Lloyd’s said its estimates for the pandemic assume that social distancing and lockdown continues in some form through 2020.
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