Lloyd’s has a provisional estimate that its total exposure to Hurricane Katrina claims is £1.4 billion ($3.29 billion). UK industry publication Reactions reported Lloyd’s Chairman Lord Levene saying: “It would be a brave man who tries to guess the scale of this loss right now.”

“You only have to turn on the TV and look at what is going on in the US. We have a pretty good idea of the loss within certain parameters. But it will take time to work out what the exact numbers are.”

Lloyd’s has developed a series of realistic disaster scenarios to ensure the market can withstand major catastrophes. One of these models the market’s exposure to a Gulf of Mexico windstorm.

Lloyd’s says the financial impact of Hurricane Katrina is consistent with that model. In addition, the estimated loss is comparable with the impact of the four US windstorms in 2004, which resulted in a net loss to the market of £1.3 billion ($3.06 billion).