Fitch Ratings has said that the £1.4bn provisional
estimate of net losses arising from Hurricane Katrina announced by Lloyd's is within current rating expectations. As a result, it has said that there is no immediate impact on Lloyd's ratings.
Fitch said that although the preliminary estimate of Lloyd's aggregate loss from Hurricane Katrina is within its rating expectations, there may be some concentration of this loss among individual Lloyd's syndicates. The agency said that in view of Lloyd's unique capital structure, the possible concentration of losses would cause it concern, especially if it were to result in substantial calls on the Central Fund.
Fitch said it takes comfort from Lloyd's statement that,
based on current information, it believes any impact of Hurricane Katrina on the Central Fund will be immaterial and said that Central Fund exposure to Hurricane Katrina will form a key element of its ongoing monitoring process.
The ratings agency said that further major catastrophe losses recorded in the remaining three months of 2005, or a significant increase in Lloyd's Hurricane Katrina loss estimate, could further affect earnings and reduce Lloyd's capital adequacy with potential negative rating implications.
