Lloyd's has updated its estimated financial impact on the market of Hurricanes Katrina, Rita and Wilma. The net loss from Katrina is now estimated at £1.9bn ($3.42bn), up from £1.4bn ($2.55bn), while Rita losses have been estimated at £535m ($947m), and losses from Wilma at £483m ($855m).
As a result, the chances of the market making a profit in 2005 are now small.
The market expects to be able to meet all its liabilities with immaterial impact on the Central Fund.
Syndicates will be supported by capital from members of over £9bn in 2006, an increase of £500m on the original plans for next year.
A number of syndicates revised their 2006 business plans following the hurricanes which have now been approved by the franchise.
As a result, the Lloyd's market expects to have the capacity to write approximately £14.7bn of business in 2006, an increase of 7% on this year. This contrasts with the position before the hurricanes, with rates softening, when it was expected that Lloyd's capacity would reduce by around 7% next year.
Luke Savage, Lloyd's Director of Finance and Risk Management said:
"Lloyd's is financially robust. All businesses in the market expect to be able to meet their liabilities from the hurricanes. Any impact on the Central Fund will be immaterial. This is clear evidence of the progress Lloyd's has made over recent years.
"The events of the past few months have shown that the determined focus at Lloyd's on underwriting discipline has not come at the expense of the market's ability to react speedily and flexibly to the opportunities brought about by changing conditions.
"Before the hurricanes struck it was expected that Lloyd's capacity would reduce in 2006. The planned increase reflects the change in market conditions and is an appropriate response from the market."
