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Lloyd's of London chairman John Nelson weighs in on the cost of disaster relief.
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-- on the map what do you think back to last year from the earthquake and tsunami in Japan to major tornadoes in the United States.
2011 was one of the biggest years for catastrophe losses ever.
Also -- big -- for and insurance companies have to deal with all of this insurance provider Lloyd's of London reported total claims over twenty billion.
Dollars and John Nelson is the chairman.
And what's London he's here with us today thank you for joining us in the studio it's as good -- via -- -- -- -- -- -- 2012 will be like compared -- -- eleven.
Or is like is -- like.
Two and it's a full cost 2000 love misty was saying there was one of the world so yes it was actually the worst year.
-- -- time where we have twenty billion dollars of claims and -- -- -- about seven billion was was catastrophe.
But the good news is that Lloyds which specializes in this kind of risk specialist catastrophe risk.
Business risk putting businesses on communities back on my feet off the catastrophes.
We came through -- with a loss of 800 million dollars which -- -- three weeks ago.
But the great news is that our capital levels -- to remain on and -- so our rating is still at a plus.
-- -- -- And our reputation is as strong probably as it's ever been -- we we managed out -- but very difficult yeah I think well.
Given a year like last year terms of the catastrophes and the losses from them what are premiums so what are insurance rates doing.
Well.
Rates in some of the sector is.
Particularly -- that -- -- sort of sectors related to west some of the major losses that were occurring further in Thailand and New Zealand and Australia.
I've definitely gone up.
The rest of the market I would say is fairly subdued but the reason for that is in policy and this is something -- -- is different from -- cycles.
Is that interest rates are very -- General insurance has to keep its assets and very liquid pool because -- sesame claims.
And the -- given -- these very -- Investment returns.
-- enough capital is looking -- incremental returns so they look for the insurance industry.
Service that there's no shortage of capital.
And that probably will keep rates subdued for a while and.
That is very interesting what do you do differently or do you do anything differently in the day to day management of your business given the environment that were added maybe what.
Took place last year -- managing risk is is more and more.
Difficult to -- you would think but did do you change -- ways -- -- yes.
I mean there's the Lloyd's is remembers the market went off an insurance company we have a few fool businesses -- and syndicates in indoors which underwrite risk.
Lloyd's itself provides -- -- besides hopefully underwriting discipline we are actually regular basis.
And the planning that goes into the way in which risk is taken -- is very sophisticated.
And within London we have.
And I think anybody in the industry would agree with this we have the greatest collection of professional -- rises in these specialists there -- anywhere in the world.
And I think 2011 was a great stress test.
Off to actually seven years eight years of fairly benign condition -- -- -- still uninsured underinsured rather yes.
What business is a particularly underinsured are in the emerging -- territories.
And thus is a big business opportunity for Lloyd's of London I'm for the -- specialist insurance market and if you if you think about it take the time floods.
Huge losses.
Six big industrial put a -- around Bangkok but was a wakeup call for reporting in fact most of that -- -- shall but I think all the countries who watching it very carefully.
John it's crazy thank you so much safe travels thank you gonna back anytime for an here -- there John -- that -- the chairman of Lloyd's of line.
