NU Online News Service, May 13, 1:01 p.m. EST
The head executive at Lloyd's of London says the market expects rates to firm as a result of first quarter catastrophes throughout the world and the April tornadoes in the U.S.
Lloyd's Chief Executive Richard Ward makes the comment in a statement providing Lloyd's estimated catastrophe losses for events in Japan, New Zealand, and Australia during the first quarter.
A Lloyd's spokesperson says Lloyd's was not providing any more detail on its rate expectations.
The earthquake and tsunami in Japan is expected to cost the London specialty insurance market $1.95 billion. The February 2011 quake in New Zealand could result in $1.2 billion in losses. Flooding in Australia to start the year will result in about a $650 million loss.
“The Lloyd's market is as well capitalized as it has ever been, and while claims from all three events could still evolve over time, the market's total exposure is well within the worst case scenarios we model and prepare for,” Ward says.
The Central Fund, similar to a mutual fund, will not be exposed to the catastrophes, Lloyd's adds.
Luke Savage, director of finance, risk management and operations at Lloyd's said in March that catastrophe losses for the 2011 first quarter were on pace to eclipse catastrophe losses for whole year in 2010, when Lloyd's yearly profit fell 42 percent to $3.4 billion, pre-tax. That year, an earthquake in Chile, the Deepwater Horizon oil rig disaster, and a quake in New Zealand resulted in about $2.67 billion in losses.
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