One more big claim would hurt

Lloyd's chief executive Richard Ward will today warn that one more major disaster could push the insurance industry into the red this year, the Guardian reports.

"It isn't overstating the situation to say that the insurance industry is facing a potential perfect storm this year," Ward is expected to says.

Speaking as the industry braces itself for the US hurricane season, Ward says: "That is a significant challenge for the industry worldwide but it is a storm we can see coming and we can prepare for. Insurers who keep their discipline and don't chase risky short-term profit will stand the best chance of long-term survival."

One more catastrophe

Ward warns: "Just one serious catastrophe could potentially wipe out the entire underwriting profit from last year."

Ward wants insurers to follow a "strict diet of underwriting discipline" and not to be lured into writing risky business in the hunt for short-term profit. He tells them to underwrite for profit, not volume and to focus on where they will be in five years' time, not one.

"During the financial crisis the insurance industry has performed very well, without the need to fall back on either government or taxpayer support. We've helped protect the economy during the crisis. Now it's time to protect ourselves."