Losses at least ?1bn, says Lloyd's

Lloyd's, London's international insurance market, is expected to reveal today that it faces losses of at least £1bn as a result of the terrorist attacks in the United States but will insist it can "survive" its share of the financial burden - already regarded as the world's most expensive insurance loss.

Lloyd's is regarded as particularly exposed to the aviation market - which has been hit hard by fall-out from the attack. It is believed to have assets of £20bn - but has so far refused to reveal the extent of its exposure.

According to Bronek Masojada, chief executive of Lloyd's syndicate Hiscox and deputy chairman of Lloyd's of London, there is little doubt that the London market - which little under a decade ago was on the brink of collapse - will be able to withstand the claims for loss of life, property damage, airline liabilities and business disruption.

He refused to comment on any speculation about Lloyd's exposure or the timing of any announcement, as did a spokeswoman for the market.

Hiscox, which underwrites a Lloyd's syndicate with exposure to insurance of property, personal accident and other risks such as event cancellation, put an early estimate on its exposure to the World Trade Centre tragedy of £20m yesterday.

"It's a serious event but it's one we can take," Mr Masojade said. Analysts estimate the cost is likely to drive Hiscox's syndicate to a £7m loss.

Hiscox's shares, which have been hurt by concern about its exposure to the attack, ended 12p higher at 91p, but still well below the 184p at which they were trading before the terrorists struck.

Mr Masojade said that the cost of property insurance, which had already started to rise before the attacks, could now involve double-digit increases for certain types of building.

Airlines have faced such high rises in premium that they need government help to pay the bills. Hiscox reported a rise in operating profits to £4.8m from £0.9m for the six months to the end of June but said it would defer any dividend payment until it had a clearer picture of the impact of the World Trade Centre attack.

Another Lloyd's vehicle, SVB, also estimated its losses from the attack at £20m while Atrium Underwriting said it faced net losses of £8m.