(Adds 9/11 reference, broker comment, Zurich, Prudential
results)
By Carolyn Cohn
LONDON, May 14 (Reuters) - Lloyd's of London is likely to
pay out $3.0 billion-4.3 billion in insurance claims related to
the coronavirus pandemic, similar to losses from the 9/11
attacks, it said on Thursday.
The pandemic has locked down economies around the world,
bringing businesses, events and travel to a halt and leading to
hefty claims.
Global non-life underwriting and investment losses may hit a
record $203 billion in 2020, the commercial insurance market
added.
Zurich Insurance said on Thursday it expected $750
million in non-life pandemic claims this year.
In a double blow, insurers have also lost money due to
falling markets, slashing the investments they use to pay out
claims.
"I don't think anyone in our industry has ever seen both
happen at once," Lloyd's Chief Executive John Neal told Reuters.
Investment losses were seen at $96 billion.
Global insured loss forecasts of $107 billion are similar to
natural catastrophe losses in 2005 led by Hurricanes Katrina,
Rita and Wilma and to 2017 including Hurricanes Harvey, Irma and
Maria, Lloyd's said.
Lloyd's' estimates do not include life insurance and assume
continuing social distancing and lockdown measures in 2020, as
well as a drop in global GDP.
The bulk of the insurance losses come from cancellation or
postponement of major events around the world including the
Olympics, business interruption claims on property insurance and
trade credit.
Small businesses in Britain are battling insurers who they
say have denied them payments for disruption. The insurers say
most small business policies do not cover the pandemic.
Lloyd's of London insurer Hiscox is one of those
under scrutiny.
"While it's important to quantify the impact of Covid-19 on
the market...we must not lose sight of the fact that this number
is a culmination of clients in crisis," said Christopher Cross,
Chief Executive of LIIBA, which represents Lloyd's brokers.
Neal said the UK domestic property sector accounted for less
than 2% of the Lloyd's market, adding that "any valid claims
should be paid".
Life insurers are also being hit by the crisis, particularly
as lockdown measures prevent agents from meeting customers.
Prudential said on Thursday its Asia first-quarter sales
were down 24% and it expected a challenging second quarter.
But the crisis is also throwing up opportunities for new
products. Lloyd's is insuring clinical trials and is considering
"Recover Re" after-the-event long-term insurance to help
businesses recover from pandemics, including COVID-19.
The underwriting floor at Lloyd's, a focal point for the
market which employs nearly 50,000 people, was unlikely to open
before August, Neal said.
But some of Lloyd's' own staff could start returning to its
City of London tower in June, he added.
(Reporting by Carolyn Cohn;Editing by Elaine Hardcastle)
Prudential (PRU)
Hiscox (HSX)
