Insurance marketplace Lloyd’s of London said the industry could lose a record $203bn globally this year due to claims related to the coronavirus pandemic as events and holidays are cancelled and companies go out of business.

Lloyd’s said that once the full scale and impact of the coronavirus pandemic is fully understood, the cost to insurers is likely to be “far in excess” of historical events like Hurricane Katrina in 2005 and the 9/11 terror attacks.

The Lloyd’s market’s own members are set to pay out up to $4.3bn (£3.5bn) this year. Losses could widen further if lockdown measures are extended into the next quarter, making the bill for Covid-19 bigger than the 9-11 terrorist attacks and all the devastating Caribbean hurricanes of 2017 combined, Lloyd’s warned on Thursday.

It said that Covid-19 was “vastly different” to natural disasters that have previously racked up big losses for insurers. Those events were geographically contained whereas the pandemic is global, systemic and will have a longer-term impact.

“Lloyd’s believes that once the scale and complexity of the social and economic impact of Covid-19 is fully understood, the overall cost to the global insurance non-life industry is likely to be far in excess of those historical events,” the insurance market said.

Some $28bn is expected to be paid in 2020 across a wide range of policies, including event cancellation, property and travel. Further payouts are expected as the effects of Covid-19 continue to unfold, on policies such as professional indemnity and credit insurance.

Lloyd’s chief executive John Neal said: “The global insurance industry is paying out on a very wide range of policies to support businesses and people affected by Covid-19. The Lloyd’s market alone is currently expected to pay claims amounting to some 4.3bn, making it one of the market’s largest payouts ever.

“What makes Covid-19 unique is not just the devastating continuing human and social impact, but also the economic shock.

“Taking all those factors together will challenge the industry as never before, but we will keep focused on supporting our customers and continuing to pay claims over the weeks and months ahead.”

Llloyd’s paid out $4.8bn in 2017 as three of the most damaging hurricanes in history destroyed parts of the Caribbean. After 9/11 it paid out $4.7bn.

Lloyd’s said that its estimates for 2020 assume that social distancing and some form of lockdown continue to the end of the year.