NU Online News Service, March 28, 11:01 a.m.EDT

Lloyd's says record catastrophe losses led to a loss of morethan $800 million for 2011 as the specialty-insurance marketexperienced the largest catastrophe-claims year in its history.

In a statement today, London-based Lloyd's says it incurredtotal net claims of $20.6 billion last year, including $7.4 billionin catastrophe claims. Lloyd's calls this the “largestcatastrophe-claims year on record for the 324-year-old insurancemarket.”

Lloyd's notes that the year includes flooding in Australia inJanuary, the second earthquake in New Zealand in February, theJapanese earthquake and tsunami in March and flooding in Thailand over the summer.

To put its losses in context, Lloyd's referred to a report fromAon Benfield that estimates catastrophe losses for the insuranceindustry in 2011 amounted to $107 billion (seehere).

“Make no mistake, 2011 was a difficult year for the insuranceindustry,” says Lloyd's Chief Executive Richard Ward in astatement. “Given the scale of the claims, a loss is unsurprisingbut it reflects what we're here to do—help communities andbusinesses rebuild after a disaster.

“It is also reassuring that, despite this loss, our financialstrength has been maintained,” he continues. “It's testament toLloyd's robust oversight and professionalism in the markettoday.”

He adds that it was disappointing that with the “exceptionallevel of catastrophes” insurance “rates have not responded morepositively.” He calls on the industry to show more discipline onthe issue of pricing.

“The Lloyd's market has emerged from its largest catastropheyear ever in a strong position,” says John Nelson, chairman. “Ourstrong capital position is unchanged and we were able to make aprofit in the second half of the year despite the floods inThailand and continuing low investment returns.”

He says 2012 will remain a challenge in the face of tougheconomic headwinds and repeated Ward's call for pricingdiscipline.

Lloyd's reports loss before tax of £516 million ($820million at the current exchange rate) compared to profit of£2.2 billion ($3.5 billion) for 2010.

The combined ratio deteriorated 13.5 points to 106.8, whichLloyd's says is in line with other estimates.

The syndicate reports a prior year reserve surplus of£1.17 billion ($1.8 billion) compared to £1.02billion ($1.6 billion) in 2010.