Lloyd's rescue plan 'best bet for names'

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The Independent Online
Lloyd's of London's rescue plan for the insurance market received unexpected backing yesterday from a persistent critic, writes John Eisenhammer.

Chatset, the independent analyst, said in its annual report: "What Names must understand is that the alternative to Equitas is grim."

Equitas will take over responsibility for asbestos and pollution liabilities that have brought ruin to many names. The total premium, to be divided among some 34,000 Names, will be about pounds 1.9bn.

Charles Sturge, managing director of Chatset, said the bill that names will face from Equitas- finally putting a cap on their losses - still looked the cheapest option.

"The overall loss bill facing Names just for the last two years has amounted to pounds 2.6bn. Against that we think a pounds 1.9bn total Equitas call looks pretty reasonable. If names are offered finality, it seems a lot cheaper than having pounds 1bn losses lobbed at you for the next 10 years," said Mr Sturge.

He did warn Lloyd's, however, that it was trying to force through Equitas on the cheap. The market professionals - managing agents, brokers and those who insure them - should contribute about pounds 700m more, Chatset suggested, since they depended on its survival.

"All of these groups have a considerable interest in keeping Lloyd's alive," said Mr Sturge.