Syndicate 745, under the management of KPH Underwriting Agencies, this week disclosed that 1,750 underwriting members would have to pay up to pounds 6,000 from their own private wealth to help meet the losses.
Standard & Poor's has given syndicate 745 a 'one-star' rating. 'Syndicates assigned one star have demonstrated the least favourable financial characteristics over the past four years on reported results,' the credit agency said yesterday.
Standard & Poor's is introducing a new 'stability ranking' service for all Lloyd's insurance syndicates. A two-star rating indicates 'mid-range' financial characteristics of syndicates over the past four years and three stars the 'most favourable characteristics'.
No stars means that the syndicates have been unable to meet any conventional criteria.
Using the latest syndicate figures, Standard & Poor's has assigned one star to 40 syndicates, two stars to 136, three stars to 95 and for various reasons no stars to 17 syndicates.
The Association of Lloyd's Members, representing more than 8,000 underwriting members, said it would be examining Standard & Poor's ratings and any factors that 'give cause for concern in connection with the financial stability of any syndicate'.
The credit agency's intervention in the mounting troubles at Lloyd's come as there is growing pressure among the 1,750 underwriting members forming syndicate 745 for more details about the losses, which have arisen on European storm damage claims in 1990.
Within the Lloyd's market it is felt that the eventual losses for syndicate 745 will be far greater than the present pounds 132m and could rival some of the worst losses reported in the 1989 trading account at Lloyd's, which led to market- wide losses of pounds 2bn.
Some members are attempting to form an action group with a view to future legal action.
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