Lloyd’s of London said Tuesday that it had completed a review of the potential loss liabilities from more than 100 of its 108 active underwriting syndicates and estimated that its overall net exposure from the September 11 attacks in the U.S. would total £1.3 billion ($1.91 billion), equivalent to 12 percent of the market’s 2001 capacity.
The amount is the single largest loss suffered at Lloyd’s in its 300 year history, but Chairman Sax Riley expressed confidence that it would survive. “While a figure of this size will have a significant impact on the Lloyd’s market, the market’s strong capital base will absorb this loss,” Riley stated. “The size of our asset base, the spread of the losses and the resilience of the reinsurance programmes in place are important in coming to this conclusion.”
The announcement explained the two-week delay in making the estimates as the result of the particular structure at Lloyd’s, which required it to examine the reinsurance arrangements of all the syndicates, the solvency of individual and corporate members, and construct new disaster scenario models. It assured the public, that, although the estimates might have to be increased as more information becomes available, they would not differ greatly from the amounts it has stated.
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