Lloyd’s of London, the world’s oldest insurance market, said claims before tax from superstorm Sandy will probably cost between $2 billion to $2.5 billion.
The estimate is consistent with total insurance industry losses of between $20 billion and $25 billion, Lloyd’s said in an e-mailed statement today. The London-based market said it expects a “minimal impact” on its member capital, while the central fund won’t be affected.
Homeowners and businesses are seeking payouts on policies to help cover losses from Hurricane Sandy, which lashed the densely populated U.S. Northeast coast on Oct. 29, causing a storm surge, extensive flooding and damage to property, after hitting the Caribbean and Bahamas. Total market losses could be as much as $25 billion, Zurich-based Swiss Re Ltd. has said.
“It has been much more of a loss for insurers than for reinsurers, specialty insurers in particular, which is what Lloyd’s is” said Christopher Hitchings, a London-based analyst with Keefe Bruyette & Woods Ltd.
Zurich Insurance Group AG, Switzerland’s biggest insurer, said on Dec. 17 that claims from Sandy could be as much as $700 million. Lloyd’s member Catlin Group Ltd estimated Sandy-related losses at about $200 million and Novae Group Plc said net costs of the hurricane could be as much as $30 million.
“The Lloyd’s insurance market remains financially strong and while claims from this storm could still evolve over time, the market’s total exposure is well within the worst-case scenarios we model and prepare for,” Chief Executive Officer Richard Ward said in the statement.