The Suez Canal’s six-day effort to clear a vessel completely blocking the southern half of the channel could result in a “large loss” for Lloyd’s of London, chairman Bruce Carnegie-Brown said yesterday, March 31st.
The prediction came as Lloyd’s recorded a combined syndicate loss of £900m ($1.2bn) for 2020, pre-tax, due to the Covid-19 pandemic.
Carnegie-Brown said that it was too early to give anything more than a ballpark figure for the Suez canal accident and subsequent blockage, but told Reuters that “it’s clearly going to be a large loss, not just for the vessel but for all of the other vessels that were trapped and unable to get through”. He said this could mean a loss for Lloyd’s syndicates of $100m or more.
Carnegie-Brown thought that Lloyd’s could be the final stop for between 5% and 10% of the total reinsurance claims arising from the blockage.
The 2020 loss for the Lloyd’s market was a sharp decline from its £2.5bn profit in 2019. Lloyd’s expected to pay out £3.4bn in Covid-19-related claims, net of reinsurance, for 2020. Carnegie-Brown said that many of those payments would be related to the cancellation of major events such as the Wimbledon tennis tournament. He also warned that Covid-19-related payments would continue this year.
The news was not all bad. Lloyd’s said that premium rates had risen by 10.8% last year and that these rate rises had continued into 2021.
The Lloyd’s underwriting floor will reopen on May 17. Carnegie-Brown said surveys showed most market employees expected to return to the office at least three days a week.