Coronavirus crisis could cost more than 9/11, insurance giant Lloyd’s warns
The insurance giant is set to pay out between $3bn and $4.3bn (£2.5bn to £3.5bn) to cover its customers around the world. And Lloyd’s warned the losses could be even higher if the lockdown runs into another quarter.
The London-based insurance market added the pandemic was likely to become more expensive than the September 11 attacks or all the hurricanes of 2017 combined.
It said: “Lloyd’s believes that once the scale and complexity of the social and economic impact of COVID-19 is fully understood, the overall cost to the global insurance non-life industry is likely to be far in excess of those historical events.”
The 2017 hurricanes and September 11 were geographically contained events but coronavirus has affected the world, Lloyd’s said.
Chief executive John Neal warmed insurers are facing one of their biggest challenges in history.
He said: “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 $4.3bn, making it one of the market’s largest payouts ever.
“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.”
Around 15 percent of the payout is expected to go to UK customers.
European customers will get around 7 percent, while those in the US and worldwide category will be paid 58 percent.
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The rest of the world will get 10 percent of the payouts.
Lloyd’s paid out $4.8bn (£3.9bn) when the Caribbean was hit be devastating hurricanes in 2017.
And after 9/11 it paid out $4.7bn (£3.8bn).
Lloyd’s said that its estimates for the coronavirus outbreak assume that some form of the lockdown and social distancing continue through 2020.
It also took into account forecasts of major declined in global Gross Domestic Product (GDP).
There have been more than 4.39 million confirmed cases of coronavirus worldwide and 296,900 people have died.
In the UK 233,151 have tested positive and the death toll is 33,614, according to the Government’s latest figures.
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