The insurance market said it was on a par with the impact of 9/11 but that it expects the eventual overall cost of COVID19 to the industry to be 'far in excess' of that and other catastrophes
Lloyd's said its preliminary pay-out estimate was in the range of £2.4bn-£3.5bn based on the assumption of"material social distancing rules and restrictions" lasting until the end of June, and that this could rise further if the current lockdown continues into another quarter.It said 15% of the pay-outs covered the UK with the remainder covering the rest of the world.
Nearly a third of the claims were for cancellations of major events such as the Olympics with others covering areas such as property insurance and trade credit. The level of total pay-outs expected by Lloyd's compares to a $4.8bn total following hurricanes Harvey, Irma and Maria in 2017 and $4.7bn resulting from the terror attacks of 11 September 2001.
"Lloyd's believes that once the scale and complexity of the social and economic impact of COVID-19 is fully understood, the overall cost to the global insurance non-life industry is likely to be far in excess of those historical events," it said. For the insurance market as a whole, Lloyd's estimates losses on claims totalling £86bn, plus an additional £77bn hit as the value of investments collapses.The insurers say most small business policies do not cover the pandemic.Mr Neal said the UK domestic property sector accounted for less than 2% of the Lloyd's market, adding that"any valid claims should be paid".
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