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Lloyd's profit drops after natural disasters

By Irene Chapple, CNN
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Lloyd's pays the price for disaster
STORY HIGHLIGHTS
  • Insurance market Lloyd's reports full year profits of £2.2 billion
  • Profits almost half previous year after natural disasters
  • Costs of Japan disaster not yet known, but estimated to be up to $309 billion
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London (CNN) -- Profits before tax at specialist insurance market Lloyd's of London plummeted 43% to £2.2 billion ($3.5 billion) after a series of natural disasters drove up claims, according to its full year results for 2010 released Wednesday.

Earthquakes in Chile and New Zealand, floods in Australia and the Gulf of Mexico oil disaster contributed to the drop in profits, the company said in a statement.

Lloyd's chairman Peter Levene told CNN he did not yet know the full cost of Japan's devastating earthquake and tsunami.

Levene said Japan's crisis would cost the company but "whenever there is a natural disaster that's what we are in business for to help to meet the costs of it, it's going to cost us money, but that's why we are there."

He added: "Are we exposed in Japan? Yes. Is it outside the normal parameters of our business? No."

Lloyd's reported a profit of £3.86 billion for the full year 2009. Lloyd's is the world's leading insurance market, made up of 85 syndicates as at December.

A study from reinsurer Zurich-based Swiss Re revealed Tuesday said economic losses from catastrophes soared to $218 billion last year. The company said the figure was more than triple the $68 billion damage of the previous year.

The cost of the earthquake and tsunami that struck Japan has been estimated at up to $309 billion by Japan's government.

CNN's Aaron Smith contributed to this article.