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Home / Insurance / Lloyds sees heavy losses from blockade of the Suez Canal; reports results

Lloyds sees heavy losses from blockade of the Suez Canal; reports results



(Reuters) – The blockade of the Suez Canal for almost a week will result in a "huge loss" for Lloyd & # 39; s London, its chairman said on Wednesday, as the insurance market recorded an advance of 900 million pounds (1.2 million). billion) loss 2020 due to the COVID-19 pandemic.

The canal is working to clear the backlog after a stranded giant container ship was flooded this week. The blockade threw global supply chains into disarray.

Bruce Carnegie-Brown told Reuters that it was too early to estimate the exact loss, but "it will clearly be a big loss, not only for the ship but for all other ships that were caught and could not get through. .

He added that this could mean a loss for Lloyd of about $ 1

00 million or more.

Liability insurance claims for ships and cargo affected by the delay are initially expected to fall on the container vessel Ever Givens liability insurer, UK P&I Club. But the insurer will also use reinsurance, part of it in Lloyd's market, industry sources say.

Mr. Carnegie-Brown said Lloyds could be on the hook for about 5% -10% of total reinsurance claims.

Fitch Ratings said this week that global reinsurance companies are likely to face hundreds of millions of euros in claims due to the event.

The 2020 loss for the 330-year-old Lloyd's market, home to about 100 syndicate members, is compared to a profit of £ 2.5 billion in 2019.

Lloyd & # 39 ;s expects to pay out 3.4 billion £ 2020 COVID-19 net claims of reinsurance, with Mr Carnegie-Brown saying many of these payments would be related to the cancellation of major events such as the Wimbledon tennis tournament. COVID-19-related payments will continue this year, he added.

But Lloyds said premium rates had risen 10.8% last year and interest rate hikes had continued until 2021.

After several closures due to the pandemic, Lloyds' guarantee room would reopen on May 17. Carnegie-Brown said surveys showed that most market employees expect to return to the office "three days a week".


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