Who will be the big Sandy losers?

A handful Lloyd’s insurers this morning revealed their loss estimates for Superstorm Sandy.

In the weeks following the cyclone, which battered New York and the US East Coast at the end of October and early November, it has been mostly US-based insurers and reinsurers that have been picking up the brunt of the claims.

Today, however, has seen Lloyd’s players Hiscox, Novae and Catlin reveal their hands. The cyclone, which is expected to be the most costliest such event since Hurricane Katrina, with an insured market loss about $20bn (£12.3bn), could hit Hiscox with £90m of losses. The insurer said this would fall within its budgeted loss expectations for 2012.

Catlin’s Sandy losses will be in the region of £123m, but there was no indication how the losses will be managed.

Novae, the smallest of the three Lloyd’s insurers, could feel the pinch more than the other two insurers. It has a stronger footprint in the USA and despite estimating considerably smaller losses within the $25m-$30m bracket, this would be between £5m-£8m above the normal amount it  allows for catastrophe losses in Q4.

Much uncertainty remains over the estimates being predicted by insurers, and it could still be many months before the true cost of this storm is known. As one online reader commented, Lloyd’s insurers may still see their losses revised upwards, as many learnt in the aftermath of the Thai floods in 2011, in which Hardy saw a big uplift in its exposure.

If the insured market loss estimates of $20bn for Sandy are correct, it will be the fourth-costliest storm on record.  Hurricance Katrina in 2005 was the costliest, at $74.7bn, followed by 1992’s Hurricane Andrew, at $25.6m, and Hurricane Ike, which hit the USA in 2008 and cost $21.1bn.

Table: Top 5 costliest windstorms

However, in contrast to the insured losses felt in 2011, which are estimated in excess of $100bn, the Lloyd’s market, including the smaller players like Novae, should be well equipped to take the affects of Sandy in its stride.