The Lloyd’s of London insurance market swung to its second-biggest loss last year after absorbing record claims from natural catastrophes, including Japan’s Tohoku earthquake and floods in Thailand. Claims from such disasters totaled 4.6 billion pounds, or $7.3 billion, marking the second-biggest loss by Lloyd’s of London since the 9/11 attacks.
Additionally, stagnant or declining premium rates have many wondering how such enormous losses can be recouped. And further regulation by the European Union may have the insurance sector eating more costs still.
A notable upside, however, is the rising demand for insurance from Asia and South America. The flow of capital from such emerging nations may work to offset the enormity of claims from last year’s disasters.