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Daily Insurance Industry News
Friday 19th of January 2018
March 27, 2009

Lloyd’s of London predicts rising premiums

by David Masters

Story link: Lloyd’s of London predicts rising premiums

Insurance premiums are set to rise this year, Lloyd’s of London said this week.

The increases are being driven by higher rates for windstorms, and coverage of airlines and bank executives, as well as declining returns on investments.

Richard Ward, Lloyd’s chief executive officer, said: “We’re seeing sort of single-digit price movements at the moment, and it’s not all lines.

“There will be a move in rates to make sure that underwriting in 2009 is profitable so that insurers have the funds to pay claims.”

It will be the first significant increase in insurance prices since 2004, and Lloyd’s is uncertain how much premiums will have to grow.

Last year saw insurance companies squeezed by costly catastrophe claims following the worst hurricane season since 2005, as well as the global credit crunch that pummelled investment income.

“Investment income is going to be particularly challenging in 2009 with interest rates down close to zero percent,” Ward said.

“Insurers are no longer going to be able to support underwriting with investment income.”

Lloyd’s profit dropped 50% during 2008, largely due to catastrophe claims.

 

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