In a statement clarifying a weekend report, Chatset, which has a good record of forecasting losses, suggested the bulk would come from the deterioration of the results from earlier trading periods rather than from 1991 itself.
Chatset said it was sticking by its January forecast of a pounds 1.2bn loss for the 1991 underwriting year, although it might be slightly lower.
However, the firm warned: 'Very serious deterioration has taken place on the old (earlier) years.
'A survey of about 30 per cent of syndicates with open years shows an average deterioration of 28.6 per cent in 1993. If applied to the other 70 per cent of syndicates, the overall deterioration to be announced this summer will be pounds 2.1bn.'
Lloyd's operates on a three-year accounting basis. Underwriting syndicates that are unable to make a reliable estimate of their potential liabilities have to remain open.
Chatset said the earlier years were very unstable, making an accurate prediction of the 1991 result almost impossible.
'The indications must be that the overall loss will be around pounds 3bn and it is not inconceivable that this figure will be exceeded.'
The traditional members of Lloyd's, the individuals whose wealth supports the underwriting activity, have lost more than pounds 5bn in the 1988-1990 years.
This has forced several thousand such 'names' to abandon the market. As part of a package of reforms, Lloyd's last year turned to corporate capital.Reuse content