Lloyd's members offered more aid: Insurance market introduces wider measures

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The Independent Online
LLOYD'S insurance market yesterday announced a new package of measures to help ease the burden of members' losses, including allowing them to use premium income received by syndicates this year to offset cash calls to pay losses from 1991.

Two forecasters predicted yesterday that the 1991 losses, to be announced next week, would be pounds 2.5bn, against earlier predictions of pounds 3bn.

Other measures include requesting that Lloyd's agents postpone cash calls to the members, known as names, for as long as possible, and speeding up the reporting process to allow names to offset losses against other income for tax purposes.

Names will be allowed to use up to 3 per cent of their 1994 underwriting capacity to either pay 1991 losses or to be used for Department of Trade and Industry solvency purposes. A similar measure last year allowed names to use 5 per cent of their underwriting capacity.

David Rowland, Lloyd's chairman, said: 'We are doing this to keep names with us. We anticipate that 1994 will be profitable, and we consider 3 per cent to be prudent.

'There is also a political judgment. If names see they are being sensibly helped they are more likely to honour their commitments to the society.'

Some market analysts said the reduction in the size of the cushion this year reflects concern that 1994 is not going to be as profitable as 1993.

Christopher Stockwell, chairman of the Lloyd's Names Associations Working Party, said: 'There are 15,000 names who are no longer underwriting but still suffering losses from old business who cannot benefit from this measure.'

Lloyd's will next week report a pounds 2.5bn loss for its 1991 year of account, according to predictions from Chatset yesterday and the Association of Lloyd's Members, which today will publish predictions it commissioned from Financial Intelligence and Research, a UK insurance market analyst.