May 25, 2011 by Canadian Underwriter
London’s insurance market is well-placed to bear the pressure it will face as a result of high catastrophe losses in 2011, according to a May 24, 2011 A.M. Best briefing.
A.M. Best observed that, in common with its peers writing global insurance business, London Market insurers have been hurt by 2011 Q1’s exceptionally high level of catastrophe losses.
Some listed companies in the market reported first-quarter claims costs arising from major catastrophe events in Japan, New Zealand and the United States that range between 6% and 18% of their 2010 year-end shareholders’ equity, the ratings agency noted.
Large U.S. hurricane losses in 2011could lead to a further erosion of capital, which could lead to pricing adjustments for the London Market’s property business in 2012, A.M. Best says.
Nevertheless, the market is well equipped to handle the strain, A.M. Best further says, because it entered 2011 with strong balance sheets, and the first quarter losses are manageable from a capital standpoint.
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