Total losses falling on syndicate 745 will have risen from pounds 39m to up to pounds 129m.
The deterioration means that the 1,750 individual members who support the syndicate will have to meet insurance claims flooding into the syndicate from their own wealth. This year, underwriting members will have to pay out up to pounds 12,000 for each pounds 10,000 of business accepted on their behalf and ultimately pay out between pounds 25,000 and pounds 30,000. In total, syndicate managers are trying to raise more than pounds 51m by July.
John Heynes, who heads the KPH underwriting agency group that manages syndicate 745, said yesterday that the 1989 underwriting account 'had been worse than expected'. In that account, underwriting members suffered larger- than-expected claims from damage caused by Hurricane Hugo in 1989.
Hurricane Hugo losses are expected to show a further deterioration from dollars 255m of losses to dollars 295m. Current underwriters acting for the syndicate reckon that other losses will cause the syndicate to exceed its present reinsurance protection.
The professional insurance broker Edward Benfield, who is a member of the syndicate and is setting up an action group of members to protect their interests, has called upon the Lloyd's authorities to open the books for the 1989 account and order a fresh audit into the results for that period.Reuse content