Lloyd’s of London expects net losses of $4.5 billion from hurricanes Harvey and Irma, which analysts said would eat into the insurer’s capital and hit its profitability.

Although losses from natural catastrophes have been low in recent years, including in the first half, that is set to change in the second half of the year, Lloyd’s chief executive Inga Beale said following Thursday’s results.

“There was limited major claim activity in the first half. There’s a very different second half emerging – it’s not only the hurricanes but we’ve got the Mexican earthquakes, floods in Asia, typhoons in Asia,” Beale told Reuters.

“The hurricane season is still in play, earthquakes can happen at any time,” Beale said as Lloyd’s reported a 16 percent profit fall in the first half of 2017.

Lloyd’s 80-plus syndicates have already paid out more than $160 million in claims from Harvey and more than $240 million from Irma, Beale said. The $4.5 billion net loss estimate was based on modeling of “known exposures,” she added.

“Given that the Lloyd’s of London market typically produces earnings of 2.1-3.5 billion pounds, it is highly likely that the market faces a capital loss,” Jefferies analysts said in a note.

Modeling firm RMS estimates total insured losses from Harvey and Irma of up to $80 billion.

Meanwhile, Beale said it was too early to assess losses from Hurricane Maria, which devastated Puerto Rico last week and which some analysts have predicted will lead to greater insurance losses than Harvey and Irma.

Lloyd’s made 1.22 billion pounds ($1.63 billion) in profit before tax in the six months to the end of June, down from 1.46 billion pounds a year earlier, although Beale said part of the drop in profit was related to currency fluctuations.

Insurance rates have been falling for the world’s largest specialist insurance market and other insurers for several years due to strong competition.

Lloyd’s return on capital worsened to 8.9 pct from 11.7 pct, due to pressure on returns from low interest rates.

Gross premiums rose to 18.9 billion pounds from 16.3 billion pounds last year, and its combined ratio improved to 96.9 pct from 98 pct in 2016. A combined ratio is a measure of underwriting profitability, with a level below 100 percent indicating a profit.

Jefferies said recent natural catastrophes meant that a combined ratio for the year of 112.5 percent for Lloyd’s “is now a possibility,” indicating higher underwriting losses than 2011, which it said was “the last major catastrophe year.”

Lloyd’s was on track to open its planned EU subsidiary in Brussels by the middle of next year, Beale said, adding the new hub would employ “tens” of people and the firm would be submitting its formal license application “very shortly.”

More than 20 insurers have announced plans for EU hubs in the event that Britain loses access to the single market as a result of its departure from the European Union. ($1 = 0.7482 pounds)