Lloyd's Profits Boosted By Few Catastrophes

Lloyd's Of London says the insurance industry is facing claims of up to $600m (£368m) from aviation disasters such as the loss of two Malaysia Airlines flights.

The specialist insurance and reinsurance market made the revelation while reporting profits of £1.67bn for the first six months - a rise of 21% on the same period last year.

It said that In terms of claims, it had been a "relatively benign period for major catastrophes".

But it added: "The most notable claims have arisen from the unusually high incidence of aviation losses, which have been sudden and tragic.

"The global aviation hull war market accounts for around $65m of premium per annum; yet already in 2014, claims could exceed $600m for the insurance industry.

"In a period when premium rates have generally fallen, most notably in the reinsurance space, this is a reminder of why pricing must reflect the underlying risks which are being written", Lloyd's said.

It said the aviation sector was already impacted by the tragic disappearance in March of Malaysia Airlines flight MH370 before the shooting down of flight MH17 over Ukraine.

Lloyd's also cited attacks at Tripoli International Airport, the loss of an Air Algerie flight to Mali and the crash of a TransAsia Airways plane in Taiwan.

It warned: "As the commercial aviation sector approaches its busiest renewal period, terms and conditions and pricing will need to reflect risk exposures".

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