James Hunt 'faced 180,000 pounds losses at Lloyd's': Thousands of underwriting members to confront market's authorities at meeting in Royal Festival Hall
Monday 21 June 1993
Hunt, who was a member of Lloyd's from 1983, is believed to have lost pounds 180,000 or more in the past two years from his investment at Lloyd's. At one stage he had investments in more than 40 insurance syndicates.
The Lloyd's analyst Oliver Carruthers, editor of the Digest of Lloyd's News, estimates that Hunt may have lost pounds 60,000 in the 1989 underwriting account and a further pounds 120,000 in the 1990 account, the results of which are to be announced this week.
Lloyd's so-called 'Blue Book', a directory of all members of Lloyd's, shows that Hunt was a member of insurance syndicate 745, under the management of the KPH Underwriting agency. Late last year syndicate 745 lurched into crisis and in October David King, the professional underwriter acting for the syndicate, was sacked by the agency managers.
Mr King left the group when it became clear that the losses of pounds 132.5m had arisen because of larger-than-expected payouts on insurance claims arising from European storm damage in 1990. In the previous account, syndicate 745 had reported losses of pounds 20m.
The syndicate comprises about 400 professionals working at Lloyd's and about 1,300 private investors, of whom Hunt was one.
Edward Benfield, a professional insurance broker, has formed an action group and is seeking financial help for the members, who have been asked to provide cash from their resources to meet insurance claims.
Mr Carruthers estimates that of Hunt's total losses of pounds 120,000 for the 1990 underwriting account, some pounds 60,000 may be accounted for by participation in syndicate 745.
'He was not one of the heaviest losers at Lloyd's, and made a few years of profit before the large losses flooded into the market. He may, of course have taken precautions to insure himself through 'stop-loss' policies against really large losses,' Mr Carruthers said.
Thousands of Lloyd's underwriting members will vent their anger at the insurance market's authorities at a meeting tomorrow during which they will be told that losses have climbed to about pounds 2.8bn, the largest in Lloyd's 305-year history.
The meeting will take place in London's Royal Festival Hall. As about 3,500 underwriting members are expected to attend, the adjacent Queen Elizabeth Hall will be used to relay the proceedings to members who cannot get into the main meeting.
David Rowland, Lloyd's chairman, and Peter Middleton, chief executive, are expected to come under renewed pressure from the members facing the largest losses to provide financial help to save them from financial ruin.
However, they are unlikely to receive any comfort. Mr Rowland and Mr Middleton told the members that there was little that could be done at a meeting last month, during which they outlined plans for the future.
Instead they will be told that business trends are improving and premium rates are rising. Members will also be told that a large investment programme for the Lloyd's market is planned by Marsh & McLennan, the world's largest insurance broker, and the investment banker JP Morgan. Marsh and Morgan are creating Trident, which will have capital of dollars 500m and dollars 1bn. Trident will be a blind trust that will invest in new operations in the Lloyd's market. Analysts expect that a considerable amount of capital could be raised for Lloyd's in 1994.
These moves and assurances are unlikely to assuage the anger of the members, many of whom believe they were deceived when they joined the market and misled while they were members. They are seeking full restitution for their losses and are planning several votes of no confidence if Lloyd's does not help.
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