The coronavirus crisis will cost insurance market Lloyd’s more than the September 11 terror attacks in the US as it expects to pay out up to 4.3 billion US dollars to customers.
“The global insurance industry is paying out on a very wide range of policies to support businesses and people affected by COVID-19. The Lloyd’s market alone is currently expected to pay claims amounting to some US$4.3 billion, making it one of the market’s largest pay-outs ever,” said John Neal, CEO of Lloyd’s.
“What makes COVID-19 unique is the not just the devastating continuing human and social impact, but also the economic shock. Taking all those factors together will challenge the industry as never before, but we will keep focused on supporting our customers and continuing to pay claims over the weeks and months ahead.”
In addition to the significant pay outs, Neal says the company will turn its attention to providing additional support to business and society through this difficult time.
“In addition to our £15 million package of charitable donations, we have set aside £15 million in seed capital to explore how the industry can create or house structures which support economic recovery and mitigate against future events of this magnitude,” he said. “We are also working with our Advisory Committees to develop a number of initiatives to support our customers and economic recovery in the short, medium and long-term.”
It is also bracing for further financial penalties after admitting these losses could rise if the current lockdown continues into the next quarter. It says once the scale and complexity of the social and economic impact of the coronavirus is “fully understood,” the overall cost to the global insurance non-life industry could exceed other historical events.
