Lloyd's of London hits bottom with huge annual loss Investors face financial ruin

June 23, 1993|By Los Angeles Times

LONDON -- Lloyd's of London yesterday announced the largest loss in the insurance firm's three centuries of history amid a tide of indignation by its 30,000 investors, many of whom stand to lose fortunes.

Lloyd's revealed that a record $4.33 billion was lost in 1990, higher than the earlier forecast and sharply higher than the $3.05 billion deficit in 1989.

"It represents in every way the low point of Lloyd's history," said David Rowland, the insurer's chairman.

Lloyd's reports its results three years late at its annual meeting, which was attended yesterday by many of its investors, known as "names." Their personal wealth underpins the market.

Thousands of names, many already ruined, others facing hardship and bankruptcy, were told that the losses were more serious than predicted -- and averaged $148,000 per investor.

The losses in 1990 stemmed from natural and industrial disasters, including America's Hurricane Hugo and the Exxon Valdez oil spill, as well as from European storms in 1990.

The losses were compounded because many of Lloyd's underwriters had insufficient reinsurance protection against the high-risk catastrophe business in which the firm specializes.

Thousands of names in Britain and the United States are suing Lloyd's underwriters. They argue that some Lloyd's officials were guilty of negligence and fraud in placing investors in risky syndicates, while Lloyd's insiders were investing in safer endeavors.

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