The move is a key part of what is seen as a make-or-break plan to save the troubled insurance market. Lloyd's will also report losses of pounds 1.2bn for 1992, below market expectations of around pounds 1.5bn. This brings to over pounds 9bn the accumulated loss in the insurance market over the last four years, which has placed unprecedented strain on names.
The loss is reported with Lloyd's customary three-year delay. Representatives of the litigating names' groups gave a broadly positive response yesterday to reports of this new offer, which represents a substantial improvement on the pounds 900m deal rejected last year.
Michael Deeny, chairman of the Gooda Walker Action Group, said: "This is not the end of the campaign, but it is the beginning of the end. People mustn't lose sight of the fact this is not an offer. It is a plan that I hope will succeed, but it's not over yet. It depends on months of negotiation that has yet to come and the distribution of the settlement offer."
Another leading names' activist, Christopher Stockwell, chairman of the Lloyd's names associations' working party, said: "They are talking about serious sums of money, and a cap [on all outstanding liabilities], and if they can make this meaningful to names, then it is likely to succeed."
A final, global out-of-court settlement with names, many of whom are refusing to meet any further liabilities to Lloyd's, is a vital part of the hugely complex restructuring and rescue package the insurance market is frantically trying to put together to carry it out of the difficulties of recent years.
Peter Middleton, Lloyd's chief executive, is also expected to provide some details today of the other elements of the package, including a levy on names to raise urgently needed cash for Lloyd's continuing business, and plans to speed the introduction of a giant reinsurance company, Equitas, which will take over and ring-fence all liabilities on policies sold before 1992. Equitas is set to have assets of pounds 20bn.
The success of the improved out-of-court offer is still seen as hanging critically on the ability of Lloyd's, with Equitas, to provide names with the certainty that after this they will not face more claims on these old policies.Reuse content