By Will Bugler
Lloyd’s insurance market has posted losses for a second consecutive year as a series extreme weather events drove claims to £19.7bn in 2018. California’s devastating wildfires, that also forced a major utility company to file for bankruptcy, were especially costly for the insurer.
Major extreme weather events, many of which are likely to become more severe under climate change, led to major claims totally £2.9bn. This included hurricanes Florence and Michael in the US, and Typhoon Jebi that hit Japan in late August.
In response to the announcement John Neal, Lloyd’s chief executive said, “We have implemented stronger performance management measures… to address the performance gap.”
The insurance industry as a whole is working hard to factor climate change into its risk models. However, should extreme weather events continue to undermine profitability, then premiums will undoubtedly have to rise. Insurers are also likely to demand more action on climate change adaptation from governments and business to reduce potential liabilities.