Lloyd's estimates £1.5bn Sandy bill

Hurricane SandyLloyd's of London has estimated it is facing claims of up to 2.5 billion US dollars (£1.5 billion) for damage caused by Superstorm Sandy in October.

The specialist insurance market, which is made up of 88 underwriting syndicates, said the bill was "well within" the worst case scenarios that it prepares for.
Chief executive Richard Ward said: "As always, our priority is to pay valid claims as quickly as possible and help the communities in North America and the Caribbean affected by Sandy get back on their feet."

Lloyd's said its estimate of between 2 billion US dollars (£1.2 billion) and 2.5 billion US dollars was consistent with wider industry losses of between 20 billion US dollars (£12.3 billion) and 25 billion US dollars (£15 billion).

Sandy, which ravaged America's North East coast, is expected to be the country's second costliest storm after Hurricane Katrina in 2005. That storm left Lloyd's facing claims worth 4.3 billion US dollars (£2.4 billion).

The market has shown in recent years that it is more than able to cope with major catastrophes and met its own claims in 2011 without any call on its central fund - its fund of last resort.

It recorded a profit of £1.5 billion in the first six months of this year, compared with a loss of £697 million a year earlier in what turned out to be the second most expensive year on record for the insurance industry.

The market saw £12.9 billion of claims in 2011, including £4.6 billion related to disasters such as floods in Australia and Thailand, an earthquake in New Zealand and the tsunami in Japan.

Mr Ward added: "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."
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