The reserves for the Ukraine claims were net of reinsurance, Lloyd’s said in a statement. Insurers buy reinsurance to offload some of the risk of large losses.
“We’ve taken a very early view of what we think the financial implications will be,” Lloyd’s Chief Executive John Neal told Reuters by phone, adding the losses were likely to be about the same size as “a small to medium-sized natural catastrophe”.
Around a quarter of Lloyd’s’ Ukraine losses may come from the aviation market, Neal said.
Aviation lessors and insurers are wrangling over planes trapped in Russia due to the invasion of Ukraine – which Russia calls a “special military operation” – and subsequent Western sanctions.
Insurers globally may face claims of around $10 billion to $15 billion from the conflict, Neal added.
Around 100 syndicates trade at Lloyd’s, which focuses on specialist risk from oil rigs to footballers’ legs.
Lloyd’s has asked its members to stop insuring new thermal coal mines as it seeks to reach net zero climate goals.
But Neal said the current energy crisis meant there could be flexibility in how to reach those targets.
“Let’s say difficult energy decisions were being taken in the next week – if they were being taken in a broader net zero context… then I think we could be open-minded and prepared to have a conversation which could include thermal coal.”
Lloyd’s this week told staff earning less than 75,000 pounds a year they would receive a 2,500 pound one-off payment in September, Neal said, following other firms in Britain in offering cost-of-living help to employees.
Lloyd’s said it made a trading loss due to rising interest rates which hit its investments, following a profit of 1.4 billion pounds a year ago.
However, its underwriting profit jumped 25% to 1.2 billion pounds. Higher premium rates have helped insurers’ underwriting profits in recent years.