Lloyd's estimates Ian cost to market at $2.3 billion to $3 billion
When Hurricane Ian struck the state of Florida at the end of September, market commentators estimated the loss to the insurance and reinsurance industry in a range between $30bn to $70bn, The higher end of the range would make it the largest catastrophe loss event in dollar terms in history.
Lloyd’s has made public its estimate of the cost of Hurricane Ian to it syndicates. This is in the range of US$2.3bn and US$3bn after reinsurance recoveries. This is within modelled losses for the market. Lloyd’s have reiterated that Ian will not impact on Lloyd’s solvency. Lloyd’s states that it expects its share of the overall market loss to be between 3% and 5%.
A loss to the Lloyd's market of $2.3 billion to $3 billion assuming a Lloyd’s market share of 3% to 5% extrapolates to an insurance industry loss in the range $60 billion to £75 billion; towards the higher end of the modelling agency ranges. Lloyd’s historic market share for US based catastrophe events has been closer to 6%. We think this emphasises the work undertaken by Lloyds and syndicates in recent years to reduce catastrophe exposure in portfolios. An interesting comparison can be drawn with 2021’s Hurricane Ida, which cost the market $2.0 billion. Despite the Ida loss, Lloyd’s reported a net combined ratio of 93.5% in 2021.
As we have reported elsewhere, the scale of the Ian loss has acted further to harden the North American catastrophe market ahead of the 2023 renewal season.
Lloyd’s full press release can be found here.