Lloyd's of London to pay out up to $4.3bn over Covid-19
Lloyd’s of London is to pay out up to $4.3bn because of the Covid-19 pandemic, the specialist insurance market said on Thursday, close to the sums it paid out following the 9/11 terrorist attacks.
Lloyd’s said it expected to pay between $3bn and $4.3bn to customers because of the pandemic, and warned that the final amount could rise further if the lockdown continues into another quarter.
The total aggregated market claims pay outs following the attacks on New York City in 2001 were $4.7bn. Lloyd's paid out $4.8bn following hurricanes Harvey, Irma and Maria in 2017, which caused devastation across the Caribbean and parts of the US.
Lloyd’s also undertook a study of potential losses caused by the pandemic. It estimates that 2020 underwriting losses covered by the industry will be approximately $107bn, on par some of the industry’s biggest ever events, such as hurricane Katrina in 2005.
But it noted: “Importantly, these natural catastrophes were geographically contained events, occurring over the course of hours and days – vastly different in nature to the global, systemic and longer-term impact of Covid-19.”
Investment falls in portfolios, meanwhile, caused by turbulence across world markets, are expected to be in the region of $96bn in 2020.
John Neal, chief executive, confirmed it would be one of the market’s largest ever payouts.
He added: “What makes Covid-19 unique is not just the devastating continuing human and social impact, but also the economic shock. Taking all those factors together will challenge the industry as never before, but we will keep focused on supporting our customers and continuing to pay claims over the weeks and months ahead.”