However, this loss, which is a relatively modest one by Lloyd's recent standards, will be inflated by an increase in the losses run up on business written before 1992.
Chatset says that this figure is hard to predict with any accuracy until later in the year. However, the firm says that the market is expecting the figure to be close £750m, although it could be as high as £2bn.
Chatset also casts doubt over whether Lloyd's will report a profit in the next two years. The 1993 and 1994 years of account for Lloyd's will make pure year profits, but these profits could be wiped out by continuing deterioration in earlier business forthe market.
Chatset expects 1993 to produce a pure year profit of £800m for Lloyd's, while it predicts that the market will make about £500m for 1994.
Much of the earlier year business producing claims at Lloyd's is third-party general liability insurance written in the US in the decade after the Second World War.
This has produced a huge stream of claims from workers in the asbestos industry and in industries, such as construction, that used asbestos.
One of the main factors which has been affecting the predicted results for Lloyd's is the poor performance of the investment markets, in particular the bond market. As a consequence of this poor performance, investment income for the market is down.
Charles Sturge, a director of Chatset, said: "If the loss is at the upper end of the range it would be very serious indeed for Lloyd's.
"Names could not stand another hit of £2bn," he said.
Mr Sturge said that unless a settlement is reached to the litigation that continues to dog the market, Lloyd's could become insolvent and have to cease trading.Reuse content