Lloyd's faces fresh fight

FRESH problems have erupted at Lloyd's of London as members of one of the oldest insurance syndicates announced that they were forming an action group to resist payment of up to pounds 60m worth of losses, writes John Moore.

In the last completed trading account for 1989, syndicate 404, under the management of Cuthbert Heath Underwriting, presented individual losses of pounds 7,727 for each pounds 10,000 of business traded by the syndicate's 2,500 members.

Alan Porter, a chartered accountant who chairs the new action group, said it intended 'to investigate allegations of negligence, misrepresentation and breach of contract in the syndicate's affairs by Cuthbert Heath Underwriting'. The group fears that the syndicate, already suffering from large losses on asbestosis and pollution damage risks, will suffer increasing losses in the future.

Standard & Poors, the credit agency, said that syndicate 404 rated only one star in its stability rankings service for Lloyd's syndicates.

With a one-star rating a syndicate is judged to have demonstrated the least favourable financial characteristics over the past four years of reported results.