Lloyd's warns Sandy's destruction could cost it $2.5bn

Lloyd's of London has warned that Superstorm Sandy, which devastated parts of the US east coast in October, could cost it up to $2.5bn (£1.5bn), making it one of the costliest disasters in the insurance market's history.

Overall, Sandy is expected to cost the global industry up to $25bn.

Lloyd's chief executive, Richard Ward, said: "As always, our priority is to pay valid claims as quickly as possible and help the communities in North America and the Caribbean affected by Sandy get back on their feet.

"The Lloyd's insurance market remains financially strong and, while claims from this storm could still evolve over time, the market's total exposure is well within the worst-case scenarios we model and prepare for."

Lloyd's disclosure comes just a day after Catlin, Hiscox and Novae admitted that the disaster was likely to cost them more than $300m.