Lloyd's set for profits of over pounds 1bn

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The Independent Online
Lloyd's of London, the troubled insurance market, is poised to announce profits of more than pounds 1bn for the 1993 underwriting year, the first since its losses began to mount in 1987, according to Chatset, the independent analysts.

In addition, Lloyd's names will receive an extra pounds 400m released by Equitas, the reinsurance rescue vehicle, of reserves from the closed years up to 1992, giving total returns of pounds 1.4bn.

However, the additional pounds 400m release by Equitas was yesterday condemned by the Lloyd's Names Associations' Working Party (LNAWP), the names' umbrella organisation.

Christopher Stockwell, a LNAWP spokesman said the money rightfully belonged to 1992 names, many of whom had been frozen out of being able to underwrite the following year by the huge reserves they were having to create.

"This blatant discrimination between names causes windfall profits for the agents and fortunate names who were able to carry on at the expense of those who were badly hit early on," Mr Stockwell said.

"To ignore the position is unreasonable and leaves the arrangements vulnerable to judicial review," he warned yesterday.

Lloyd's is expected to announce its preliminary "global" results for the 1993 underwriting year on 12 July. Earlier internal estimates had suggested profits of up to pounds 900m, against higher estimates by Chatset.

Charles Sturge, a director at Chatset, said yesterday that his organisation's figures were simply estimates and had not yet been validated: "But we think they are a reasonable account of what will be announced."

Chatset's estimates suggest that the "pure result" for 1993, made up of underwriting and investment profits less expenses, will be pounds 1.184bn minus agents' fees and commissions of pounds 53m.

This implies an average total return to 1993 names of 15.8 per cent. Among the better returns, syndicates operating in the marine market returned averages of more than 20 per cent, with many rising above 25 per cent.

Among non-marine syndicates, some are likely to benefit even more from the Equitas reserves being released to 1993 names.