Reserves for claims in Ukraine were net of reinsurance, Lloyd’s said in a statement. Insurers buy reinsurance to offload some of the risk of large losses.
“We have taken a very early view of what we believe to be the financial implications,” John Neal, Lloyd’s chief executive, said by phone Archyde.com, adding that losses were likely to be regarding the same size as “a natural disaster of small medium scale”.
About a quarter of Lloyd’s Ukraine’s losses might come from the aviation market, Neal said.
Aviation lessors and insurers are vying for planes scavenged in Russia due to the invasion of Ukraine – which Russia calls a “special military operation” – and subsequent Western sanctions.
Insurers around the world might face claims in the order of $10-15 billion as a result of the dispute, Neal added.
Around 100 syndicates operate at Lloyd’s, which focuses on specialist risks ranging from oil rigs to footballers’ legs.
Lloyd’s has asked its members to stop insuring new thermal coal mines as part of its efforts to meet net zero climate targets.
But Neal said the current energy crisis meant there might be some flexibility in how to achieve those goals.
“Let’s say tough energy decisions are made next week – if they’re made in a broader net zero context… then I think we might be open-minded and ready to have a conversation that might include thermal coal.”
Lloyd’s this week announced its staff earning less than £75,000 a year would receive a one-off payment of £2,500 in September, Neal said, following other UK companies offering cost-of-living assistance their employees.
Lloyd’s said it suffered a trading loss as rising interest rates affected its investments, following a profit of 1.4 billion pounds the previous year.
However, its underwriting profit jumped 25% to £1.2bn. Rising premium rates have boosted underwriting profits for insurers in recent years.
($1 = 0.8748 pounds)
