August 31, 2001 by Canadian Underwriter
Insurance market Lloyd’s of London is predicting that loss for the last two years will exceed 2 billion pounds (US$3 billion). Because Lloyd’s reports its results three years in arrears, it must estimate losses in the interim. For 1999, the market expects losses of 1.39 billion pounds (US$2 billion) and for 2000, losses of 694 million pounds (US$1 billion).
The losses for 1999 are largely the result of tough competition in the auto insurance market and catastrophes claims, including those resulting from French storms and earthquakes in Taiwan and Turkey.
2000 losses were influenced by the sinking of an oil rig in Brazil and claims under directors and officers (D&O) policies, including those against dot.com companies by disappointed investors.
“1999 is widely acknowledged to represent the low point of the global insurance market and Lloyd’s results reflect those conditions,” the market states in a press release.
The market did note that trends show hardening insurance rates worldwide. A recent report by the Association of Lloyd’s Members predicts the market could see a profit for 2002.