The syndicate is 475, which has more than 1,400 underwriting members and is managed by Spratt & White. In the last trading account for 1989 it announced losses of more than pounds 14m, amounting to nearly pounds 6,000 for each pounds 10,000 of business accepted by its members.
Now the syndicate has been hit by further and worsening claims arising from European windstorm damage in January 1990.
According to information sent out by Spratt & White, losses appear to have climbed from pounds 14m to nearly pounds 54m.
Trevor Bradley, chairman of Spratt & White, says in a letter to other agents who have introduced members to the syndicate that there has been a suggestion by the original underwriter, Roy Bromley, 'that the 1989 and 1990 years should, on an underwriting basis, be profitable. Any such statement is incorrect. It would be our wish to ask Lloyd's to undertake a loss review now.' However, this cannot be done until underwriting members are asked to meet the growing claims from their own resources.
Lloyd's launches its own investigations into how losses have arisen only if the losses exceed the financial backing of a syndicate. In this case the losses are threatening to climb to 200 per cent after the latest trading results have been taken into account.
This is one of the worst cases to have arisen in the wake of Lloyd's last two disastrous years, in which losses of pounds 500m and pounds 2bn were reported. The trend suggested by syndicate 475 is that losses could be far worse than the pounds 1bn that the market's authorities have predicted for the 1990 account, the latest completed trading period.Reuse content