Lloyd's of London Insurers Eye $375M Sandy Hit

LONDON (Reuters) - Three of the Lloyd's of London insurance market's leading players owned up to a combined loss of about $375 million from superstorm Sandy and warned the final bill could change.

Bermuda-based insurer Catlin, operator of Lloyd's biggest syndicate, is set to absorb about $200 million in claims from Sandy, it said on Tuesday. Rivals Hiscox and Novae put their exposure at 90 million pounds ($145.79 million) and between $25 million and $30 million respectively.

Sandy, a 1,000-mile wide storm that killed 132 as it swept through the north-eastern United States on Oct. 29, is expected to cost insurers up to $25 billion, making it the second-costliest storm after hurricane Katrina in 2005.

Insurers and analysts have said the size of the affected region, which includes New York and other densely populated and industrialised areas, makes the final damage bill difficult to calculate.

"This estimate is subject to a considerable degree of uncertainty due to the size of the storm system, and the wide variety of damage it caused," Catlin said.

Sandy came at the end of a relatively uneventful year for natural catastrophes, in contrast with 2011, the insurance industry's second-costliest on record after earthquakes in Japan andNew Zealand generated a claims bill of over $100 billion.

The comparative absence of big disaster claims during the first nine months of 2012 means the insurance industry is still expected to turn a profit for the year as a whole.

"We expect Sandy will have turned what would have been a very benign catastrophe year and a very strong earnings year back into a relatively average one," Joy Ferneyhough, an analyst at Espirito Santo bank in London, wrote in a note.

Catlin shares were down 3 percent by 0945 GMT against a 0.3 percent rise in the mid-cap FTSE 250 share index, partly surrendering a 21 percent gain since the start of the year. Hiscox and Novae were 0.8 percent lower and 1.9 percent higher respectively.

Top U.S. insurers AIG and Allstate have estimated their Sandy losses at $1.3 billion and $1 billion respectively, while Swiss Re, the world's No.2 reinsurer, has said it expects to pay out $900 million.

The Lloyd's of London market, a collection of about 80 competing insurance syndicates that sell protection against natural catastrophe and other risks worldwide, has not yet said how much Sandy will cost it collectively.

Lloyd's which traces its origins back 324 years to a London coffee house where merchants met to insure ships, has historically borne about 10 percent of the claims burden from major natural disasters, analysts say.

Lloyd's insurer Beazley expects to take a $90 million hit from Sandy, it said on Friday.

Comments

Resource Center

View All »

Complimentary White Paper: The Compression of Workplace Time

How brokers and carriers respond to the compression of workplace time will create significant competitive...

The Changing Insurance Consumer: 6 Ways to Create Profitable Relationships

Today’s mobile and web-savvy consumers have new expectations when it comes to interacting with your...

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Risk Management for Law Firms

This package of 3 concise risk management articles offers straightforward content and practical suggestions law...

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.