Hurricane Sidney

The major claims problems facing London Market companies and Lloyd's syndicates arise from the deterioration of casualty claims, including asbestos and pollution, or a large property catastrophe, such as a hurricane or earthquake. This paper hypothesizes a US hurricane landing in Florida. The company will face losses from a variety of classes in its business profile. Without knowing the full extent of its actual losses, it can roughly measure its exposure to such a catastrophe. It can then trace its reinsurance programme, and determine the net loss to the company. There are many complications and considerations en route. The paper explains how these are dealt with and uses numerical examples throughout. Much of the inevitable jargon is translated to enhance the general understanding. In the light of various hurricanes over the last few years that have caused concern or even significant damage, the paper shows how a London Market insurer views the hurricane from the other side of the Atlantic.