Lloyd's of London says Covid claims could reach £5b

London

THE coronavirus bill for insurers continues to mount with Lloyd's of London saying it expects to pay out up to £5 billion (S$8.91 billion) in claims.

The world's largest insurance market announced a pre-tax loss of £400 million for the first half of the year after reinsurance provisions helped cover some £2.4 billion of losses from Covid claims. The firm posted a £2.3 billion profit for the same period last year.

"The first half of 2020 has been an exceptionally challenging period," chief executive officer John Neal said in a statement on Thursday. "The pandemic has inflicted catastrophic societal and economic damage, calling for unparalleled measures to stifle the spread of the virus, and to get businesses and economies back on their feet."

The results come as the industry grapples with a string of massive payouts including ongoing costs related to the coronavirus outbreak, an early hurricane season that's already caused tens of billions of dollars in losses, and a massive explosion in Beirut's port that damaged swathes of the city.

In May, Lloyd's predicted a torrid year for insurers with around US$203 billion in losses as shutdowns hit economies and stock markets slumped. As claims from affected businesses flooded in, some insurers halted dividend payouts and rushed to raise capital while governments moved to support more exposed sections of the industry, such as trade credit insurance. The exchange operator received some 30,000 claims related to the outbreak, Mr Neal told Bloomberg in June.

Swiss Re AG earlier this week posted a surprise US$1.1 billion first half loss as it set aside money to cover future losses related to the pandemic. Munich Re also took a 1.5 billion euro (S$2.43 billion) first-half hit and said it faced claims of at least 100 million euros related to the Beirut blast. BLOOMBERG