Lloyd's insurer says estimate is "broadly consistent with its year to date budget for catastrophe claims".

Chaucer has announced its early assessment of the effect of Hurricanes Gustav and Ike.

The Lloyd's insurer said the preliminary estimate for the cost (net of reinsurance and reinstatement premiums) of these two events is approximately $55m.

In statement, Chaucer said this is broadly consistent with its year to date budget for catastrophe claims and, in the absence of further insurance catastrophes, should not have a material adverse effect on the Group’s expected underwriting result for the period.

The group added its investment portfolio has been affected by the current turmoil in the financial markets, not only in equities and hedge funds but also because of the widening of spreads in credit markets. For the 9 months to 30 September, investment losses were £29m (a return of -2.8%).

Ewen Gilmour, chief executive, said “Hurricane Ike is likely to have caused one of the largest hurricane losses in US history. We expect the impact on Chaucer, though commensurate with a major market loss, to reflect recent reductions in our energy exposures in the Gulf of Mexico.

"Additionally, these events, combined with the instability of financial markets, are likely to have a beneficial effect on premium rates in energy and US property classes.”