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Lloyd's records $1.9bn in losses tied to six months of Iran war
Lloyd's said it does not expect the conflict to trigger a capital event for its market, even as pre-tax profit fell 16.8% in the half-year.
Lloyd's of London put a figure on losses tied directly to the US-Iran conflict, estimating £1.4 billion, or $1.9 billion, in underwriting losses for the first six months of fighting in the Gulf, according to its half-year report. The insurer said underwriting profitability remained robust despite the Middle East losses, pointing to the scale of gross written premium of £34.7 billion and capital of £48.4 billion. Chief executive Patrick Tiernan said, based on exposures and observed damage to date, Lloyd's does not currently expect the situation to become a capital event for the Lloyd's market or materially impact profit and loss. Lloyd's reported that overall pre-tax profit fell 16.8% to £3.5 billion for the half, while rates across the market fell 6.7%, nearly double the pace of decline last year. The report did not break the £1.4 billion losses down by line of business, but the outlet said the impact has been felt hardest in marine, energy, and political violence exposures across the wider Lloyd's market. The reporting also noted that the US Development Finance Corporation's $40 billion maritime reinsurance program had placed zero dollars of coverage earlier this year, despite being positioned as a way to restore energy flows through the Strait of Hormuz. Brokers and underwriters told Insurance Business UK the program was built on a misdiagnosis, arguing that cover had remained available but at heavily repriced levels, while tanker traffic collapsed more than 80% before a formal blockade was declared.