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Wednesday, 10 April, 2002, 14:08 GMT 15:08 UK
Terror attacks cost Lloyd's 2bn
Lloyd's of London
Lloyd's: Further losses feared
Lloyd's of London insurance market has said the 11 September terror attacks pushed it deep into the red last year.

2001 was an exceptional year by any measure

Lloyd's chief executive Nick Prettejohn
The market's losses came in at 3.11bn ($4.35bn) in 2001, the institution said.

It blamed massive claims stemming from the World Trade Center attacks, now projected at 1.98bn, up from an initial estimate of just 1.3bn.

Lloyd's, hit in 1999 and 2000 by bankruptcies, French storms, and Asian earthquakes, has now made a loss for each of the last three years.

Profits seen this year

Last year's 3.11bn loss was calculated using standard one-year accounting techniques.

Under Lloyd's usual three-year accounting procedures, which allow losses to be spread over several years, its losses for 2001 narrowed to just 1.56bn, from 1.72bn the year before.

Lloyd's chief executive Nick Prettejohn said he expects a return to profitability this year, citing "extremely buoyant" trading in recent weeks.

"2001 was an exceptional year by any measure," he said.

Record claims

The 11 September-related claims are the biggest the 300-year old insurance market has ever faced from a single event.

Lloyd's faced further substantial claims last year from an explosion at a chemical plant in Toulouse, and tropical storms on the east coast of the US.

Due to lengthy claim assessment procedures, Lloyd's reports its final results with a three-year time-lag.

Its final losses for 1999 came in at 1.95bn under three-year accounting procedures, up from an earlier estimate of 1.67bn, the organisation said on Wednesday.

Swiss Re woes

Earlier on Wednesday, the world's second-biggest reinsurer Swiss Re said it lost $99m last year, below initial estimates of $120m.

The loss, also blamed on the World Trade Center attacks, was the company's first in 130 years.

The total cost to insurers of the attacks is expected to come in at about $50bn, making 2001 the industry's most expensive year ever.

The BBC's Jenny Scott
"It has been the biggest single claim in the history of the insurance industry"
The BBC's Brian Milligan
"Critics believe the present crisis is not the result of unforeseen disasters but of poor risk assessment"
See also:

26 Sep 01 | Business Basics
Lloyd's names count the cost of terror
26 Sep 01 | Business
Attacks to cost Lloyd's 1.3bn
12 Sep 01 | Business
Insurers face record claims
30 Aug 01 | Business
Lloyd's asks members for more cash
26 Sep 01 | Business Basics
Lloyd's of London - a risky business
17 Oct 01 | Business
Lloyd's names in cash call
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