Lloyd's syndicate faces 80m pounds losses on wind damage

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The Independent Online
A LEADING Lloyd's of London insurance syndicate has been hit by large claims arising from the windstorm damage in Europe in 1990 and faces losses of more than pounds 80m.

Last week David King, the underwriter for the syndicate, number 745, formed of 1,750 underwriting members, resigned ahead of a meeting this week of anxious underwriting agents which introduced members to the syndicate. The agents are assessing the position.

Unlike conventional insurance companies, Lloyd's keeps its books open for three years rather than completing annual accounts. The system is designed to allow claims to be matched to policies nearest to the year in which they were accepted.

Results of the last completed trading account for Lloyd's - for 1989 - were released in the summer and showed a deficit for the entire market of more than pounds 2bn, the worst in Lloyd's 300-year history. For the 1989 account, syndicate 745 reported a loss of more than pounds 20m, but the syndicate's managers hoped the position would improve.

For individuals on the syndicate, last year's results mean that for each pounds 10,000 of business traded on their behalf they would have lost pounds 5,167.

For 1990 they face losing up to pounds 10,000 on each pounds 10,000 of business accepted on their behalf.

It was hoped that losses would be no more than pounds 1,000 for each pounds 10,000 worth of business accepted.

Mr King, 60, who had underwritten for the syndicate since 1980, was widely respected in the market. His troubles with syndicate 745 are seen as reflecting a wider market malaise.

Last week, the Independent revealed that syndicate 561, under the management of the Bankside Underwriting Agencies group, had been poised to make a large profit for the 1992 underwriting account.

Following insurance claims from Hurricane Andrew in the last few weeks, it was unlikely that syndicate 561, consisting of about 3,000 underwriting members, would do better than break even.

In Lloyd's there is a dramatic wave of job losses as underwriters refuse to insure certain types of high-risk business. And with fewer people coming forward as members in the wake of the huge and potentionally ruinous losses at Lloyd's, syndicates and agency companies are being forced to merge.

Within the Lloyd's building huge amounts of business space are becoming vacant, and Lloyd's is letting it out to divisions within insurance companies.

The trends at Bankside and syndicate 745 will dismay the authorities of the market, who had hoped that the business cycle had turned sufficiently to attract new members to Lloyd's.