Moody’s Investors Service issued a new statement on Monday which forecast increased losses at Lloyd’s of as much as £3 billion ($4.5 billion) for the last three years.
Moody’s previous loss estimates, made last March, and the new estimates, announced yesterday, are as follows:
1998 – was £771 million ($1.15 billion) revised to £1.1 billion ($1.65 billion). Loss estimate in terms of capacity = 10.7 percent.
1999 – was £775 million ($1.16 billion) revised to £1.2 billion ($1.8 billion). Loss estimate in terms of capacity = 12.6 percent.
2000 – was £496 million ($744 million) revised to £700 million ($1.05 billion). Assumes a “normal” loss experience.
Moody’s found no bright spots in any of Lloyd’s major sectors. The statement noted that motor (auto) insurance would result in a 21.3 percent loss in terms of capacity for 1998, but was expected to improve in 1999 to 12.9 percent, and in 2000 to 6.5 percent.
Losses in marine coverage were expected to increase to 17.5 percent in 1999 from 1998’s 10 percent and retreat to an estimated 11.4 percent loss in 2000.
Moody’s indicated that the loss percentage in terms of capacity for the aviation, non-marine and composite sectors should also show improvement in the results this year compared to 1998 and 1999 results, but warned that unless rates hardened considerably the losses could be expected to continue in all sectors.
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