Lloyd's of London sees global pandemic insurance losses above previous estimate

FILE PHOTO: A worker enters the Lloyd's of London building in the City of London financial district in London, Britain, February 1, 2018. REUTERS/Simon Dawson

(Reuters) - Global insurance losses from the COVID-19 pandemic will be higher this year than the $107 billion Lloyd’s of London had previously estimated, its Chairman Bruce Carnegie-Brown said on Wednesday.

Carnegie-Brown told the Reuters Events Future of Insurance USA conference that pandemic-induced losses will be on a par with 2017, when three Atlantic hurricanes contributed to a catastrophe bill of $144 billion, the highest on record according to Swiss Re SRENH.S.

Lloyd’s, which in March shut its underwriting room for the first time since World War II due to a UK government lockdown, said Lloyd’s firms were facing claims from 16 different business lines.

“Unlike many events, a pandemic is everywhere at the same time,” Carnegie-Brown said, adding that the outbreak had extended longer than expected.

The 330-year-old Lloyd’s operates a commercial insurance marketplace, insuring anything from oil rigs to footballers’ legs. It has said it will pay 2.4 billion pounds in pandemic-related claims for the first six months of 2020.

Lloyd’s has proposed a “Black Swan” reinsurance scheme to governments globally to ensure better cover during circumstances such as the pandemic and other disturbances to business, but Carnegie-Brown said it was hard to get government attention on the topic so far.

“The challenge for governments of course is that they are very short-term focused... (it is) very difficult for them to lift their heads above the parapet and think about the future,” Carnegie-Brown said.

Cyber exposure remained the biggest risk faced by insurers, he added, echoing comments made earlier this week by insurance broker and consulting firm Marsh & McLennan MMC.N.

“As a world, we need to look at our resilience to cyber risk exposures.”

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Carolyn Cohn in London and Jan Harvey