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Moody’s Investors’ Service said in a statement Monday it sees Lloyd’s of London losses in the 1998 to 2000 years of account totalling over 3.0 billion pounds ($4.48 billion), after previously estimating losses of just over £2 billion.

The ratings agency sees a 1.1 billion pound loss for 1998, a loss of 1.2 billion for 1999, and a 700 million pound loss for 2000, reflecting extremely poor market conditions and a recent adverse loss experience.

In its previous forecast in March, Moody’s estimated the insurance market’s losses at 771 million pounds for 1998, 775 million for 1999, and 469 million for 2000. Later in the same month, Lloyd’s reported a loss of 209 million pounds ($331.8 million) for its 1997 year, the latest year to close under its three-year accounting system.

In terms of percentage of capacity, Moody’s latest estimates represent losses of 10.7 percent for 1998, and 12.6 percent for 1999, taking into account early releases from prior years. The 1999 year, and particularly 2000, are at early stages of development, and a 'normal' loss experience is assumed for 2000, Moody’s added.

Mark Hewlett, managing director of Moody’s European Insurance Division said in the statement, "Although market conditions are generally improving, a sizeable loss is currently forecast for 2000, and we continue to believe that a significant hardening of rates will need to occur if the 2001 year of account is to return a profit."

The ratings agency expects motor will be the worst performing sector for 1998, and marine the worst performing sector for 1999 and 2000.

Moody’s forecast the following losses for Lloyd’s major sectors, expressed as a percent of capacity:

1998

1999

2000

Sector

Marine

-10.0

-17.5

-11.4

Composite

-6.0

-10.1

-5.1

Non-Marine

-11.0

-13.3

-8.3

Motor

-21.3

-12.9

-6.5

Aviation

-14.7

-16.9

-8.8