29 September 2017Insurance

Lloyd’s $4.5bn nat cat loss set to widen with Hurricane Maria

The Lloyds loss disclosure of $4.5 billion from Hurricane’s Harvey and Irma leaves open a possibility for another large loss estimate for Maria, Credit Suisse analysts said in a Sept. 28 note.

Windstorms Harvey and Irma made landfall on the US and the Caribbean towards the end of August and early September 2017, respectively. These events have caused significant damage in the states of Texas and Florida in the United States and to a number of islands in the Caribbean.

While noting that it is currently too early to reliably estimate the financial impact of these loss events to the Lloyd’s market given the level of uncertainty, Lloyd’s preliminary analysis indicates net claims, after reinsurance, to the Lloyd’s market in the region of $4.5bn.

However, potential losses from Hurricane Maria may further impact Lloyd’s. Windstorm Maria made landfall on a number of Caribbean islands towards the end of September 2017.

"There is a high degree of uncertainty of the value of insured losses and at this stage we have not yet quantified the financial impact [of Hurricane Maria] to the Lloyds' Market," according to the Lloyd’s first half 2017 report.

Insured losses from Hurricane Maria will be between $15 and $30 billion, according to estimates by risk modelling firm RMS.

For the first six months of 2017, Lloyd’s reported pre-tax profits of £1.22 billion, down from £1.46 billion in the same period in 2016.

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