But by 1988, Lloyd's was in loss, the deficit of pounds 509.7m its first in 20 years. This mounted to pounds 2.06bn the following year and is expected to reach pounds 2.8bn when the 1990 results are reported in June. Names have departed in droves, leaving only 20,000, and the capital base, as high as pounds 11.4bn in 1991, has shrunk to pounds 8.8bn.
Lloyd's has been partly the author of its own misfortunes and partly a casualty of an unusually prolonged and deep worldwide insurance downturn. It is still paying for bad business written in earlier years with huge losses arising on US industrial disease and pollution business written mainly in the early to mid-1980s. A rapid succession of disasters from the Piper Alpha oil rig, the Exxon Valdez oil spill and the San Francisco earthquake to storms across Northern Europe and hurricanes Hugo and Andrew merely added to the market's huge troubles.
The practice of reinsuring layers of risk back into the market and eventually back into the same syndicate - the notorious spiral - meant some syndicates picked up the tab for risks they thought they had laid off. The result is that some 17,000 names are involved in 30 legal actions against Lloyd's.Reuse content