Lloyd’s expects $2.3 billion in net losses from Los Angeles wildfires

(Reuters) — Lloyd’s of London said Monday it expects $2.3 billion in net losses from the recent Los Angeles wildfires, as the insurance marketplace reported a dip in underwriting profit for last year.

The estimated loss from the wildfires in January, which killed more than two dozen people and destroyed or damaged more than 16,000 structures, follows an announcement by Germany’s Munich Re that it faced about €1.2 billion ($1.3 billion) in claims from the fires.

Hannover Re, another German reinsurer, forecast claims of €700 million, while French insurer Axa XA estimated a pretax impact of about €100 million.

“We would like to extend our deepest sympathies to those affected by the California fires earlier this year. Although we are still assessing the full impact, we do not expect this to be a capital event,” Burkhard Keese, Lloyd’s chief financial officer, said in a statement.

Lloyd’s said the estimated losses were not included in the preliminary results for 2024 that it released Monday. Final full-year results are to be published March 20.

Mr. Keese described 2024 as an “excellent underwriting year” for Lloyd’s, as gross written premiums rose 6.5% on a year-over-year basis to £55.5 billion, thanks primarily to growth in its property and reinsurance divisions.

However, underwriting profit dropped to £5.3 billion, 10% lower than the £5.9 billion it reported for 2023.

Lloyd’s said its combined ratio rose to 86.9%, up from 84% in the previous year.