Investors who are members of Lloyds of London syndicates have had to contend with some major losses this year, as disasters such as the Swissair crash, and hurricanes have given rise to some huge insurance claims.

The string of catastrophes began with the Canadian ice storm in January which resulted in the most expensive ever natural disaster to affect the Canadian insurance industry. Estimates have put the cost of the insured loss at up to Can$1.45 billion (£670 million).

Sedwick Oakwood, Lloyd's underwriting agent, has received estimates of the impact of this storm on the Lloyd's market with the gross loss likely to exceed £60 million sterling (£68 million). The storm, as it turns out, was a precursor for the first major hurricane of the season, with Hurricane Bonnie hitting the North Carolina coast in August. It moved in a northerly direction and passed through North Carolina and into southeastern Virginia, with the estimated cost of the damage thought to be $1 billion (£681 million), with an insured loss of £360 million.

Two days later, the Galaxy 10 communications satellite was launched from Cape Canaveral but exploded just 80 seconds later. It was valued at $250 million and was insured through a number of markets including Lloyd's. The full extent of the loss that will be settled with Lloyd's is still uncertain. Another claim arose from the Swissair flight crash in September, with the loss of 230 lives. The aircraft's hull was valued at $126.5 million and the current estimate for passenger liability is $514.5 million although it is believed the overall loss could yet reach $800 million. As this is the first claim to be made under a new aviation industry initiative, there is no limit on the extent of liability which applies to each airline ticket. If the value of the loss reaches the top end of the estimates, it is likely that this will almost wipe out the entire premium paid by all airlines worldwide this year and would be the largest single loss to the airline insurance market.

Sedgwick Oakwood states that none of the losses in itself is particularly material to the market as a whole but that cumulatively, they are having a psychological effect on a number of insurers and will ultimately impact on investor returns in the sector.