Names, who put up their own money to underwrite Lloyd's insurance policies, are leaving the market in droves since the huge losses in the late 1980s.
Latest figures show that over the course of the year, 2,020 individual members left Lloyd's, while a further 1,105 switched to underwriting on a limited liability basis - the less risky investment option of being only liable to pay a limited amount on claims.
Only 6,835 names will remain on the traditional unlimited liability basis. They will underwrite about 19 per cent of the market's 1998 capacity, compared with the current year when there were 9,959 members accounting for 22 per cent of Lloyd's capacity.
Lloyd's said the move did not significantly decrease its capacity to underwrite as it was now gaining more money from corporate, rather than individual, investors.
Corporate investors will next year provide 60 per cent of the capacity, pumping in an extra pounds 2.5bn compared with 1997. This is the first time that corporate members have underwritten the majority of insurance risk in the market.
Figures released yesterday indicated an allocated capacity of pounds 10.13bn in 1998, down from pounds 10.30bn in 1997. Lloyd's said the pounds 20m drop was a small percentage of the pounds 10bn total.
Traditionally, individual members with unlimited liability have underwritten capacity at Lloyd's, though many were forced out or chose to quit following losses of over pounds 8bn for the underwriting years from 1987 to 1992. In order to maintain capacity, Lloyd's turned to corporates and other limited liability vehicles.
Lloyd's hit problems after a number of massive claims, such as the Exxon Valdez oil spill, asbestosis cases in the United States and the Piper Alpha oil platform explosion. Manynames took heavy losses, including the ex-boxer Henry Cooper and the former jockey Lester Piggott.Reuse content