Lloyd's, once regarded as the 'Harrods' of London's insurance community, has produced results not seen in British business life since the National Coal Board (now British Coal) produced the greatest annual loss reported of pounds 3.9bn in 1984.
In the past three years Lloyd's has racked up pounds 5.5bn, leaving the members with an average loss of more than pounds 160,000. A further pounds 1bn of losses are expected to be reported next year.
David Rowland, Lloyd's chairman, told 1,800 anxious underwriting members at the Royal Festival Hall that the loss-making trend represents 'in every way the low point of Lloyd's history in the last 305 years'. During a three-hour meeting he was told by one member that huge deficits had been concealed from members, leaving them to suffer massive losses without realising it. Another speaker claimed Lloyd's was riddled with a 'culture of corruption' similar to that which brought down the BCCI bank.
Others accused the professionals in the market of being 'swindlers'. 'When are you going to throw them out?' demanded a member of Mr Rowland. Another asked what Mr Rowland was going to do about alleged 'backhanders' being arranged as part of business transactions. Mr Rowland said that any member with evidence of wrongdoing should report it to the market's authorities.
Many underwriting members have alleged that those working in the market have made secret profits at the expense of the ordinary investor who does not work there. Some 17,000 members are taking legal action against market companies.
The Serious Fraud Office is investigating the affairs of the Gooda Walker underwriting agency which produced losses of more than pounds 900m.Reuse content