Lloyd's will suffer major Katrina-related losses that nonetheless will not threaten the solvency of its Central Fund, according to a new report from Moody's.
The report noted that Lloyd's has estimated the impact of the hurricane on all of its syndicates at $2.5 billion--equivalent to 10 percent of its 2005 capacity.
A 10 percent loss on capacity would be equivalent to 20 percent of capital, which Moody's termed "a relatively high figure compared to other entities, although containable within earnings for most syndicates at this stage of the underwriting cycle."
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