Lloyd’s of London yesterday confirmed previously published reports that it would have losses exceeding $3 billion for the years 1998-99 with a projected loss in 1999 of nearly $2 billion. 2000 figures are expected to show some improvement with losses estimated at around $1 billion.
While these figures aren’t the “official results”, those won’t come out until 2002 and 2003 under Lloyd’s three-year accounting system, they’re undoubtedly pretty close. Lloyd’s noted that 1999 had been a particularly difficult year with tough competition in the motor insurance market, earthquakes in Taiwan and Turkey, and the end of the year storms which caused widespread damage in France and other European countries.
“1999 is widely acknowledged to represent the low point of the global insurance market and Lloyd’s results reflect these conditions,” said the announcement. While rates were still low in 2000, there were far fewer natural disasters than in the previous year, which helped decrease the losses.
Lloyd’s expressed optimism for the future, stating that “With shrinking capacity in the global insurance market and hardening rates, current trading conditions look increasingly positive. Lloyd’s believes that the overall trend fits with the picture of the market emerging from the depths of the insurance cycle experienced in 1999.”
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