Belfast Telegraph

Lloyd's pays price for disasters as profits plunge

By Holly Williams

Insurance market Lloyd's of London saw profits almost halve last year after a string of natural disasters sent claims soaring.

The earthquakes in Chile and New Zealand, as well as floods in Australia, led to "significant" claims in 2010 and sent profits plunging 43% to £2.2bn.

The specialist insurance market, which is made up of 85 underwriting syndicates, said it was still too early to give an estimate on the bill from the Japanese quake and tsunami.

It hopes to provide an estimate in May, but said it believed total claims would fall within its realistic disaster scenario - which looks at a $64bn (£39bn) earthquake centred on Tokyo.

Lloyd's members, who insure insurers, suffered hefty share falls after an estimate suggested the bill could reach £22bn for the Japanese crisis, excluding tsunami damage.

Catastrophe risk expert AIR Worldwide said the insured loss could climb to between $14.6bn (£9bn) and $34.6bn (£21.5bn) for the earthquake damage alone.

But one insurance expert warned that with the tsunami bill added in, the cost to the insurance industry could rise above $60bn (£37bn).

Richard Ward, chief executive of Lloyd's, said 2010 had seen a higher than average number of natural disasters and added 2011 had already been an "extraordinary year of tragic natural disasters".

Lloyd's insurers were also knocked last year by $386m (£240m) after BP's catastrophic oil spill.