Lloyd's names hear an unfamiliar word
Tuesday 31 October 1995
It sounds almost too good to be true, as unfortunately, it does seem to be. The best names can hope for is one day to get back a share of any surplus from the funds they are being asked to put into Equitas to cover all liabilities for policies at Lloyds written before 1993. However, that day could be a long time coming, so only the more youthful and patient among the hordes of loss-making names can even contemplate their Equitas windfalls.
One of the big problems facing N M Rothschild, the merchant bank charged with the thankless task of attracting outside investors to Equitas, has been the difficulty of projecting a claims pattern for all the outstanding liabilities.
Without this, it is very hard to satisfy investors' need to know what sort of returns they can expect.
Some of the latest policies which would go into Equitas were written less than five years ago, which means having to wait another 30 for the claims against them to be run off.
It may not take quite as long as that to assess whether the pounds 16bn proposed for Equitas is sufficient to cover the liabilities, but it will require a good many years.
Moreover, the history of American attempts to set up special re-insurance funds to cover potential liabilities suggests that, far from ending up with a surplus, they usually find the level of claims has in the meantime risen, and the funds provided to cover them turns out to be inadequate. Equitas claims to be different, in that it is trying something on a scale not done before. Hope springs eternal, but don't hold your breath.
- 1 The difference between a migrant and refugee, in one sentence
- 2 Miley Cyrus calls out hypocrisy of women’s nipples being taboo
- 3 Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
- 4 Watch the Supermoon live: How to see the brightest Moon of the year tonight
- 5 iPhone 5c to be discontinued, no iPhone 6c to replace it
Spain accused of 'provocation' after letting Russian submarine refuel off Gibraltar
The difference between a migrant and refugee, in one sentence
Allonautilus scrobiculatus: World's 'rarest' creature spotted for only the third time ever
Miley Cyrus calls out hypocrisy of women’s nipples being taboo
Bangkok Bomb: Thai police name Adem Karadag as suspect arrested over blast that killed 20
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Stock up on canned food for stock market crash, warns former Gordon Brown adviser
Labour leadership: Jeremy Corbyn voters most likely to believe 'world is controlled by a secretive elite'
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...