Lloyd's syndicate acts over rogue transactions

A LLOYD'S of London insurance syndicate yesterday mounted an urgent damage limitation exercise after two of its employees had quit over allegations of selling unauthorised insurance cover worth more than $150m (pounds 91m).

Hiscox PLC issued out a statement to the Stock Exchange to squash speculation that it had been left exposed to huge losses because of the unauthorised sales at one syndicate, known as syndicate 33.

David Edwards, an underwriter at the syndicate, and his immediate boss, Paul Hunt, resigned after it emerged that Mr Edwards had written insurance business with no authority and failed to record it in the syndicate's records.

Mr Edwards had rushed to sell lucrative insurance contracts to buyers of Chinese and Korean-built ships - business which a separate team in the syndicate was trying to secure. However, he insured the shipyards against credit risks when he was only authorised to insure against physical damage. He also failed to enter the risks on to Hiscox's recording system - meaning the risk did not figure in the company's accounts.

Hiscox, which specialises in non-marine risks such as kidnap and ransom insurance, said it had issued a statement because of speculation the contracts had left the firm exposed to heavy losses if the ship contracts went wrong.

Bronek Masojada, managing director of Hiscox, said: "We believe the speculation has had an impact on trading in Hiscox shares." Shares yesterday stood at 192p, down from a high of 205p in January. Hiscox insisted the business had not left it exposed because it was covered by reinsurance. Hiscox would only have to pay a maximum of pounds 1m.

Mr Masojada said: "There is no hint of impropriety - my view is that [Mr Edwards] thought he had done the right thing. What normally happens is that people only realise what was happening when the claims come in."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific