Attorney General's Lloyd's syndicate could lose pounds 300m: Mounting claims will hit group including MPs and peers. John Moore reports

Click to follow
The Independent Online
LOSSES on a Lloyd's of London insurance syndicate could soar to more than pounds 300m, according to internal projections.

The syndicate, which includes among its members the Attorney General, Sir Nicholas Lyell, and the estate of the late James Hunt, the racing driver, has already been hit by losses of pounds 130m but these are expected to worsen.

Other members of the syndicate formed by more than 1,750 underwriting members include the MPs Tristan Garel-Jones, James Arbuthnot, Henry Bellingham, Anthony Steen and David Tredinnick as well as Lord Bethell and Lord Denham.

The syndicate, 745, under the management of the KPH Underwriting agency, has been hit by losses caused by Hurricane Hugo, windstorm damage, Exxon Valdez, Atlantic Richfield and the Phillips refinery.

In the 1990 underwriting account, members of the syndicate were showing a loss of pounds 29,832 for each pounds 10,000 worth of insurance business traded on their behalf. In the previous account members had suffered losses of pounds 5,386 for each pounds 10,000 of business traded. The amount of loss for each individual on the syndicate could at least double, according to latest estimates.

The losses that could arise for the 1990 underwriting account and previous years are estimated to be about 700 per cent of the total financial resources of the syndicate of pounds 43m, which enables it to accept business.

In a recent out-of-court offer by Lloyd's to head off the possibility of legal action, members of syndicate 745 were offered just pounds 28m to meet their losses. The entire market was offered a global settlement of pounds 900m. The Lloyd's initiative was rejected by more than 20,000 underwriting members who have sufferd pounds 5.5bn worth of losses in three years. They are expected to sustain a further pounds 2bn worth of losses when the results for the last completed trading period are reported later this year.

Most of the members rejected Lloyd's settlement offer, and it has been withdrawn.

An extensive campaign of legal action is planned, which includes litigation by the members of syndicate 745, against companies operating at Lloyd's in an effort to gain better compensation for their losses.

This week Members of Parliament disclosed for the first time their involvement in Lloyd's as part of their outside business activities.

Comments