Lloyd’s of London Projects $2.3 Billion Loss from L.A. Wildfires
(Reuters) — Lloyd’s of London has forecasted a substantial net loss of $2.3 billion resulting from the recent wildfires in Los Angeles. These fires, which erupted in January, tragically claimed the lives of over two dozen individuals and caused extensive damage, impacting more than 16,000 structures.
The anticipated losses follow an earlier declaration by Germany’s Munich Re, which estimated claims of approximately €1.2 billion ($1.3 billion) due to the fires. Similarly, Hannover Re projected claims worth €700 million, while French insurer Axa XA estimated a pretax financial impact of approximately €100 million.
Burkhard Keese, the Chief Financial Officer of Lloyd’s, extended heartfelt condolences to those affected by the devastating fires, stating, “We would like to extend our deepest sympathies to those affected by the California fires earlier this year. Although we are still assessing the full impact, we do not expect this to be a capital event.”
It’s noteworthy that Lloyd’s has not included the estimated losses from the wildfires in the preliminary results for 2024, which were released on Monday. The final full-year results are expected to be published on March 20.
Despite the anticipated losses, Mr. Keese characterized 2024 as an “excellent underwriting year” for Lloyd’s, with gross written premiums experiencing a 6.5% increase compared to the previous year, reaching £55.5 billion. This growth is largely attributed to advancements in their property and reinsurance sectors.
However, the underwriting profit saw a decline, dropping to £5.3 billion, which is a 10% decrease from the £5.9 billion reported in 2023. Additionally, Lloyd’s combined ratio increased to 86.9%, a rise from 84% in the prior year.
