Lloyd's of London has warned that insurance premiums could rise as a result of global natural disasters.
The company provides underwriting to insurers, effectively offering them a measure of cover against paying out unexpectedly high amounts. While insurers build in an expectation of disasters when calculating premiums, the first few months of 2011 has seen far more major incidents than usually takes place in such a short spell, including flooding in Australia, earthquake in New Zealand, the tsunami in Japan and violent storms across the southern United States -- all developed economies where insurance is common place.
According to Lloyd's, a series of disasters on such a scale is bound to have knock-on effects even in comparatively peaceful countries such as the UK, simply because of how interconnected the insurance market is.
One financial expert told the Daily Mail he expected average household insurance would rise by 10% this year as a result. However, it's worth noting that shopping around can save almost 50% on average premiums, so it is possible to mitigate the effects.