The Lloyd's of London insurance market said today the chances of it making a profit in 2005 were small after it faced claims of around £2.9 billion (€4.2 billion) from the costly US hurricane season.
The world's largest insurance market raised its net loss estimate from Hurricane Katrina, the insurance industry's costliest event on record, to €2.8 billion.
Hurricanes Rita and Wilma will cost it €783 million and €707 million respectively, the market said.
"The losses may be larger but Lloyd's is financially strong and we can take it in our stride," finance director Luke Savage said.
The 317-year old market, which was brought to the brink of collapse in the 1990s after a series of storms and disasters and a buildup of unresolved claims, expects to be able to meet all its liabilities and said none of its 62 syndicates or mini-insurers had been made insolvent from the storms.
The devastating trio of US storms, which killed more than one thousand people, displaced over one million are expected to cost the insurance industry around €67 billion.
A growing list of insurers and reinsurers have scrapped profit forecasts following the season, including Hannover Re and Swiss Re. Munich Re, the world's largest reinsurer, has estimated a net loss of €750 million from the US storms.