Lloyds Of London Warns On Outlook; First 6 Months Of 2011 Costliest Such Period In Industry History

[hatrack]

Lloyd's of London is warning that the insurance industry faces an extremely challenging outlook as the world's oldest market slipped deep into the red following record claims from natural disasters.

An unprecedented run of catastrophes in Australia, New Zealand, Japan and the US has led to insurers paying out billions of pounds this year. This made the first half of 2011 the costliest six-month period in the insurance market's 323-year history.

Richard Ward, Lloyd's chief executive, said 2011 was shaping up to be the second-worst year on record for the insurance industry – after 2005, which saw Hurricane Katrina wreak havoc across the southern US. Others, including Lloyd's of London insurer Hiscox, believe this could easily be the most destructive year ever.

"If we see more catastrophes come through it could well be ," said Ward. "Things will get more and more challenging. We're faced with a pretty dire economic environment. Everyone is talking about sovereign debt default and a double-dip recession. It doesn't make happy reading. The economic environment is, of course, affecting all our clients." This makes it harder for insurers to raise the cost of cover. Ward warned: "While interest rates are low and equity markets are volatile, we can't rely on investment income to subsidise our underwriting, we must decline under-priced risks."

EDIT

http://www.guardian.co.uk/business/2011/sep/21/lloyds-london-record-claims-natural-disasters

[ChandlerJr]

1. Those earthquake sure can get expensive

I wonder if the estimates for our east coast one are in yet?

[Vincardog]

2. You would THINK that the PTB would want to minimize the effects of Global Climate Change instead of

paying for them and more in the future.