Insurance giant Lloyd’s of London says they will take a “large loss” following the blockage of the Suez Canal by a freight carrier for nearly a week.
Lloyd’s Chairman Bruce-Carnegie Brown made comments to the press that the canal blockage would likely lead to a “large loss” to the tune of as much as $100 million. This comes after the insurance industry saw a $900 million pre-tax loss in 2020 from COVID-19 related claims.
The canal blockage caused by the Ever Given freighter has had significant effect on the insurance market, who will likely be on the hook for other vessels that could not move cargo through the canal. Liability for the Ever Given was contracted through U.K. P&I Club, but Brown estimates that Lloyd’s will be responsible for anywhere from 5% to 10% of reinsurance claims.
Lloyd’s in expecting to pay 3.4 billion pounds ($4.6 billion) in COVID related insurance and reinsurance claims for 2020, some of these coming from the cancellation of major events like Wimbledon.
In 2019, Lloyd’s posted a net profit of 2.5 billion pounds ($3.4 billion) in 2019 prior to any pandemic closures.
The insurance mogul expects pandemic-related claims to continue into 2021, but foresees a likely increase in insurance premiums and has already increased their premiums by 10.8% since their levels last year.
© Fourth Estate
® — All Rights Reserved.
This material may not be published, broadcast, rewritten or redistributed.