Lloyd’s Says Estimates of Total U.S. Damage ‘Deeply Flawed’

September 13, 2001

The Lloyd’s of London insurance market have cautioned that any specific estimate of the absolute cost in financial terms for the insurance industry of yesterday’s tragedy in the United States is highly speculative and unwise at this stage.

Saxon Riley, Chairman of Lloyd’s, commented: “The situation in New York and Washington is evolving continually. The global social and economic effects are only just starting to be felt. Any calculation of the total losses so soon after the event can only be deeply flawed.

“This tragedy has far reaching implications for many types of insurance, aside from appalling loss of life and the obvious property and aircraft damage. These are simply unquantifiable at present.

“Lloyd’s is a market not a company — a market made up of over 100 different businesses writing a wide range of insurances, supported by multiple reinsurance programs. As a result, its analysis is made even more complex.”

Lloyd’s confirmed that it will not release any aggregate loss figure until such time as it has more detailed information.

On Sept. 12, Reuters reported that the terrorist attacks against the U.S. could have a devastating impact on Lloyd’s of London. The article noted that Lloyd’s is still in the process of recovering from significant losses it suffered over the past two decades, notably from a large number of bankruptcies of Lloyd’s members due to claims ranging form floods, an oil rig explosion and asbestos-related diseases.

According to that article, Lloyd’s experts had affirmed that the terrorist attacks would inevitably have a negative impact on the 300-year-old insurance market giant, whose syndicates bore the brunt when $510 million was paid out by insurers after the 1993 World Trade Center bombing.

It was further reported that Lloyd’s third largest underwriter, Amlin Plc, had delayed reporting its mid-year results until Sept. 18 due to the tragedy. By 10:35 GMT Sept. 12, Amlin shares were reported to be down 21.7. In addition, two other Lloyd’s underwriters, Hiscox Plc and BRIT Insurance Plc, fell 18.6 percent and 11.4 percent, respectively.

Topics USA Excess Surplus Market Lloyd's

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