Lloyd's insurance shares hit by fallout from Hurricane Harvey

Lloyd’s of London battened down the hatches on Tuesday as underwriters sized up possible multi-million-pound losses from Hurricane Harvey.

Lancashire, which owns Lloyd’s insurer Cathedral, and Hiscox saw shares fall 3.6% and 3.8% respectively while Beazley shed 2% due to fears the storm in Texas will lead to big payouts.

Panmure Gordon estimates £200 million of net losses for Lancashire and £100 million each for Hiscox and Beazley from the hurricane, which is expected to dump 50 inches of rain.

Estimated losses are expected to rise to $12 billion (£9.3 billion) although America’s National Flood Insurance Program is likely to absorb some.

Lloyd’s insurers have benefited from a benign claims environment in recent years although Harvey is unlikely to be a market-turning event, Peel Hunt’s Andreas van Embden said.

“We do not see this as being the size of a Katrina or Sandy,” he added.