Lloyd's members are asked for a further 307m pounds

Click to follow
The Independent Online
MORE than 2,000 underwriting members of the troubled Lloyd's insurance market are to be asked to pay pounds 307m from their private wealth to meet losses falling on seven insurance syndicates once managed by the Gooda Walker underwriting agency.

The call for money is by managers of a 'caretaker' agency company, GW Run-Off, looking after the affairs of the Gooda Walker agency company, which went into liquidation last year.

So far the underwriting members have been asked for pounds 238m from their own resources to meet claims but the call for a further pounds 307m pushes the total demand to nearly pounds 550m, the largest cash call to be made on a small group of underwriting syndicates in Lloyd's 300-year history.

The move follows last week's disclosure to the members that the syndicates have lost a total of pounds 491m in the 1989 underwriting account, the last completed trading account.

The losses of the Gooda Walker syndicates account for nearly a quarter of Lloyd's total losses of more than pounds 2bn.

Ralph Sharp, chairman of GW Run-Off, which was appointed by Lloyd's to deal with the chaos at the agency in the wake of its liquidation, has told members: 'The syndicates are not in a position to effect alternative finance to cover deficiencies. It is therefore regrettable but necessary that further cash must be called in order to meet the syndicates' anticipated liabilities.'

The biggest cash calls centre on two syndicates, 290 and 298, where members are expected to pay pounds 114m and pounds 129m respectively.

Because of the size of the losses on these two syndicates, GW Run- Off is calling for the money in two instalments. Members of syndicate 290 are expected to pay more than pounds 70m by the end of this month and the balance in February next year. Members of syndicate 298 are expected to pay pounds 88.7m by the end of this month and the balance next February.

Half of the Gooda Walker losses have arisen because the syndicates took on the risks of other Lloyd's syndicates. The other half arose because the syndicates insured the risks of insurance companies.

Mr Sharp said yesterday that if he did not receive the money by the relevant dates he would be making an application to Lloyd's to draw down on the deposits that members are required to lodge with the market.

If the deposits were insufficient to meet the losses Mr Sharp said he would expect Lloyd's to use its central fund of pounds 500m to meet the claims of policyholders.

Alfred Doll-Steinberg, a Gooda Walker underwriting member heading an action group that is seeking financial relief for members, said the cash call 'is understandable. There is limited cash flow.'