Lloyd's of London counts cost of disasters

Lloyd's of London yesterday said Chile's earthquake and the Gulf of Mexico oil rig explosion could cost it two billion US dollars (£1.4bn) in net claims.

The specialist insurance market, which is made up of 78 underwriting syndicates, warned the estimates may vary but said there was unlikely to be any call on its central fund as a result of the events.

It said net claims from the Chile earthquake earlier this year were in the region of 1.4 billion US dollars (976.4m), while the current estimate for claims from the Deepwater Horizon explosion is between 300 million dollars (209.2m) and 600 million dollars (418.4m).

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Lloyd's said loss information after a severe earthquake can take longer to obtain than from other events while the Gulf of Mexico situation is ongoing.

Chief executive Richard Ward said: "Clearly these events have had a significant impact on both Chilean and US-coastal communities, as well as a severe environmental cost in the case of the oil spill off Louisiana.

"Our priority remains to assess and settle valid claims as quickly as possible in both regions and helping to rebuild."

The update came as a report said almost half the Lloyd's syndicates had launched a legal action in an attempt to block efforts by BP to claim on cover held by the rig operator Transocean. The syndicates claim BP's contract to lease the rig from Transocean specifies that its insurers would only be held responsible for damage to the rig itself – not for pollution caused by a leak from it.