Lloyd's has large share of deficit

Click to follow
LLOYD'S of London, the insurance market, was responsible for nearly pounds 650m of Britain's pounds 8.6bn current account deficit last year, according to figures on City earnings published yesterday by British Invisibles, writes Robert Chote.

Overseas claims on Lloyd's underwriters exceeded premium payments by pounds 645m in 1992. This was the third successive year in which Lloyd's underwriting activities have been a drain on the current account, bringing the total outflow to pounds 1.24bn. In the peak years of 1986 and 1987, Lloyd's was responsible for a pounds 2.75bn inflow.

Overall, City institutions generated a net pounds 7.1bn inflow of service income, up more than 18 per cent on 1991. The net inflow of income on investments handled by City institutions rose more than 20 per cent to pounds 11.7bn.

The banks were the biggest source of net service income from abroad, contributing pounds 3.99bn last year. Despite the Lloyd's losses, the insurance industry generated a net inflow of pounds 622m in service income, down 18 per cent on 1991 but up on 1990. Securities dealers generated a pounds 1.19bn inflow, up from pounds 757m in 1991.

Banks and the insurance industry accounted for most of the inflow of investment income, generating pounds 7.37bn between them. Lloyds had a net inflow of investment income of pounds 912m.

View from City Road, page 22