US hurricanes take toll on Lloyd's profits

The Lloyd's of London insurance market slid to a small loss in 2005 as a result of large hurricane claims but said its financial…

The Lloyd's of London insurance market slid to a small loss in 2005 as a result of large hurricane claims but said its financial position remained strong,

Lloyd's, the world's largest and oldest insurance market, said it made a pretax loss of £103 million (€147 million), its first loss in four years, after being hit by the worst year on record for natural disasters.

The market made a profit of £1.37 billion (€1.95 billion) in 2004.

The insurance industry saw its costliest year ever for claims in 2005, with catastrophe claims of $83 billion, of which $65 billion came from hurricanes Katrina, Rita and Wilma, which buffeted the United States and the Caribbean.

READ MORE

Lloyd's had net claims of €4.7 billion from the string of major hurricanes but said it remained in sound financial shape.

Although Lloyd's claims from the 2005 hurricanes were well above its €2.8 billion hit from the World Trade Center attacks in 2001, the market's overall annual loss last year was tiny compared with its €4.4 billion loss in 2001.

Lloyds attributed this to its better risk-management procedures put in place since the September 11th attacks.