Financial News

  • 20 December 2012, 2:04

Superstorm Sandy To Cost Lloyd's Insurance 1.5bn

The Lloyd's of London insurance market has estimated claims totalling 1.55bn ($2.5bn) arising from Superstorm Sandy in the US but says the figure could rise.

Its preliminary estimate was released after the deadly weather system caused an estimated 15.5bn ($25bn) of damage while wreaking havoc in the north eastern US at the end of October, killing 132 people.

The market said its exposure would not cause it financial stress.

Lloyd's, a collection of about 80 competing insurance syndicates, said it expected total net claims of between 1.25bn and 1.55bn.

Chief executive Richard Ward said: "The Lloyd's insurance market remains financially strong and, while claims from this storm could still evolve over time, the market's total exposure is well within the worst case scenarios we model and prepare for."

Lloyd's added there would be no impact on Lloyd's central fund, a reserve used to meet claims if any individual syndicate finds itself unable to pay.

Sandy, a 1,000 mile-wide storm which packed sustained winds of 90mph, torrential rain of more than 9 inches (23cm) in some states and then snow, is expected to be the second-costliest storm after hurricane Katrina in 2005.

Thousands remain displaced from their homes amid the continuing clean-up and reconstruction effort.

A six hour star-studded concert in New York on December 12 to benefit the victims, which featured performances from Bruce Springsteen, the Rolling Stones and Sir Paul McCartney, is now reportedly distributing the first 31m ($50m) in support funds.

Congress is debating the merits of a 37bn ($60bn) aid package the White House has proposed to assist the rebuilding programme.

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