LONDON (Reuters)—Last year's Thai floods look set to cost the Lloyd's of London insurance market $2.2 billion, the third-biggest loss it has absorbed in its 324-year history.

The initial loss estimate is based on a projected overall industry hit of between $15 billion and $20 billion and could change, but Lloyd's is financially strong enough to cope, Chief Executive Richard Ward said in a statement on Tuesday.

"The Lloyd's market is as well capitalized as it has ever been," he said. "Paying these claims is within the normal course of business for Lloyd's."

The floods, Thailand's worst in 50 years, began in July and indundated large swaths of the country's center and northeast regions before finally subsiding in December.

At $2.2 billion, the cost of the floods would rank as Lloyd's third-biggest loss in absolute terms, surpassed only by Hurricane Katrina and the Sept. 11 attacks, a Lloyd's spokesman said.

Estimates of the insurance hit from Thailand's floods, initially put at about $10 billion, have risen steadily as slowly receding flood waters have allowed loss adjusters to gauge their impact more accurately.

The cost to insurers also has been inflated by a rash of business interruption claims after the floods disabled factories operated by major Japanese and U.S. multinationals, triggering a shortage of components in the car and electronics industries.

Hannover Reinsurance Co., the world's third-biggest reinsurer, on Monday said it expected claims of €196 million ($258.7 million) from the Thai floods, nearly double its initial estimate of €100 million ($132.0 million).

"Generally when companies have come out they have come out with high estimates—it does look like Lloyd's has taken more than their average share," said Collins Stewart analyst Ben Cohen, who estimates that Lloyd's has historically borne 10% of large insurance losses.

The Thai floods contributed to total catastrophe claims of $108 billion in 2011, making it the insurance industry's second-costliest natural disaster year on record, according to reinsurer Swiss Re Ltd.

Lloyd's, which traces its origins back to a 17th-century coffee house where merchants insured ships, reported a $1 billion loss in the first half of 2011, weighed by claims including a $1.95 billion hit from the Tohoku earthquake in Japan.

The market, made up of over 80 competing insurance syndicates backed by a common central fund, will report its results for 2011 as a whole on March 28.