Names plan legal action over pounds 63m Lloyd's loss

Click to follow
LEGAL action is expected against the Lloyd's insurance underwriting agency Rose Thomson Young and a range of other companies, writes John Moore.

This follows an internal Lloyd's report into how losses of more than pounds 63m arose in a syndicate managed by the agency.

Details of the Lloyd's report, revealed in the Independent this week, conclude that the losses that hit nearly 1,000 underwriting members were the result of errors of judgement and lack of a full appreciation of the market by Norman Bullen, a professional underwriter acting for Rose Thomson Young's syndicate 255.

Syndicate 255 had specialised in insuring other syndicates at Lloyd's and insurance companies against the risk of large losses on oil rig business.

Tom Benyon, founder of the Society of Names, representing Lloyd's insurance syndicates facing the worst of the troubles, said yesterday: 'Legal action is planned, but we are also trying to get insurers of agency companies like Rose Thomson Young to talk about possible out-of-court settlement terms.'

The report adds that Mr Bullen was not helped 'by the lack of effective management control on the part of the agency'.

Mr Bullen, it says, took risks representing nearly five times the allocated premium income limit allowed to underwriting members of the syndicate.

Trading went wrong in 1988 after the Piper Alpha oil rig explosion, which led to a flood of claims.