Jonathan Gaisman, counsel for 3,095 names on loss-making Gooda Walker syndicates, said Mr Andrews had given three different versions at different times of his method of monitoring syndicate 298's aggregate exposure, and suggested he had never bothered to calculate the aggregate figures. Mr Andrews angrily denied this.
Mr Gaisman said: 'You are just making it up as you go along, are you not, Mr Andrews?'
Mr Andrews replied: 'I really object to that.' Mr Gaisman continued: 'You are lying, are you not, Mr Andrews?' Mr Andrews said: 'Certainly not. This is the exercise we did. How else could we possibly know how to reinsure?'
Mr Gaisman said: 'You did not know how to reinsure, which is the reason the '89 year of your syndicate lost more money than any other syndicate in the history of Lloyd's'
Syndicate 298's losses for 1989 were pounds 323.6m by the end of 1993.
Mr Andrews explained that the syndicate kept a record of the risks written and from these he could calculate approximate aggregate exposures in various categories of business. During the busiest season of insurance renewals he would do this calculation once a week, or twice for the riskiest category. The calculation took a whole weekend.
Mr Gaisman said: 'Would you not agree that any prudent underwriter would put in place a system giving immediate and accurate information about aggregates?' Mr Andrews said: 'It would help, certainly.' Mr Gaisman asked: 'Are you a competent underwriter?' Mr Andrews replied: 'I thought so, yes.'
Mr Gaisman gave several examples of specific business written by Mr Andrews that had been placed in a low-risk category, for which little reinsurance protection was bought, and suggested that they had all been misclassified. He said: 'You agree that the assessment of the risk potential of the largest class of your writings was totally wrong?'
'It is proven to be wrong,' said Mr Andrews.
Mr Gaisman suggested that if the business in that category had really been low-risk, Mr Andrews' syndicate would not have won so much at the rates it had been able to charge. The buyers of the reinsurance he was providing would have been wasting their money. 'I felt honestly that if they were prepared to pay, who was I to say no?' said Mr Andrews.
The hearing continues on Monday.Reuse content