Lloyd’s incurs $3.8 billion in catastrophe claims in Q1

Lloyd’s of London has incurred claims of Cdn$3.8 billion as a result of natural catastrophes in 2011 Q1, and the next major event that hit may be a capital event, said Richard Ward, Lloyd’s chief executive.A posting on the Lloyd’s web site describes a speech Ward recently offered at an industry conference. The last time Lloyd’s faced claims of this magnitude – in 2005, when hurricanes Katrina, Rita and Wilma hit the southeast US – the market was hard, Lloyd’s reported. “In many ways, 2011 bears a closer resemblance to 2001, when the tragic events of 9/11 occurred during a soft market and Lloyd’s recorded a combined ratio of 140%,” the report says.Ward called on industry to tighten rates. “Prices are dangerously low at present. Clients may think they are getting a bargain,” he said. “But the fact is that they are buying security. The insurers who write unprofitable business are inevitably the first to collapse when disaster strikes.”