London-The blockade of the Suez Canal for nearly a week will cause a “big loss” to the Lloyd’s of London, the chairman said Wednesday. The insurance market recorded a pre-tax loss of £ 900 million ($ 1.2 billion) in 2020. COVID-19 pandemic.
The canal is working to clear the backlog after this week’s re-emergence of a giant container ship left behind. The blockage has disrupted the world’s supply chain.
Bruce Carnegie Brown told Reuters that it was too early to estimate an accurate loss, but “clearly large not only for vessels, but for all other vessels that were trapped and unable to pass. It will be a loss. “
He added that this could mean a loss of about $ 100 million or more for Lloyd.
Liability insurance claims for vessels and cargo affected by the delay are initially expected to fall to UKP & I Club, the liability insurance company for the container ship Ever Given. However, UK P & I clubs also take advantage of reinsurance, some of which will be used in the Lloyd’s market, industry sources say.
Carnegie Brown said Lloyds could be targeting about 5 to 10 percent of all reinsurance claims.
Fitch Ratings said this week that reinsurers around the world are likely to face hundreds of millions of euros in claims due to the incident.
The 2020 loss of the 330-year-old Lloyds market, home to about 100 syndicate members, will be compared to a profit of £ 2.5 billion in 2019.
Lloyds expects to pay £ 3.4 billion in 2020, COVID-19 is a reinsurance-deducted claim, and Carnegie Brown said many of these payments were for canceling major events such as the Wimbledon Tennis Tournament. It states that it is related. He added that COVID-19-related payments will continue this year.
However, according to Lloyd, premium rates rose 10.8% last year and continued to rise until 2021. Insurance companies usually raise interest rates after experiencing significant losses.
After several pandemic closures, Lloyd’s underwriting floor will reopen on May 17. According to a survey, most market employees expect to return to the office “more than three days a week,” according to Carnegie Brown.