Lloyd's Announces $22.5 Billion Capacity

Lloyd's Announces $22.5 Billion Capacity

By Lisa S. Howard, International Editor

NU Online News Service, Dec. 12, 11:55 a.m. EST, London?Lloyd's capacity for 2003 is estimated to be a record ?14.25 billion ($22.5 billion), compared to the ?12.3 billion ($19.4 billion) of capacity available to the market for 2002, Lloyd's of London Chief Executive Officer Nick Prettejohn announced.

The new capacity record is "a demonstration of powerful commercial and financial strength, in defiance of the predictions of a number of pessimistic observers," Mr. Prettejohn said.

His remarks were delivered at a New York conference sponsored by Standard & Poor's with the Black Diamond Group.

"It is a new record which clearly demonstrates that Lloyd's businesses have been successful in attracting new capital," he said. "Indeed, nearly $9 billion of capital has been injected into the Lloyd's market over the last two years."

The Sept. 11, 2001, U.S. terrorism losses demonstrated Lloyd's commitment to paying claims, he said.

"Over the last 12 months, Lloyd's underwriters have placed $5 billion in our U.S. Trust Funds and have paid out $2.5 billion of claims in relation to Sept. 11 alone, and our loss estimates have stabilized," he said.

In other Lloyd's news, the Association of Lloyd's Members estimated that individual Lloyd's Names, who participate at Lloyd's on both a limited and an unlimited liability basis, increased their capacity levels to ?3.0 billion ($4.7 billion) for 2003, from ?2.8 billion ($4.4 billion) for 2002.

"It is good news that many Names have been able to finance their recent losses and increase their underwriting," said Michael Deeny, chairman of the Association of Lloyd's Members in London, in an ALM statement.

"This shows the resilience of private capital, which continues to be a key supporter of many of the best syndicates at Lloyd's," he added.

The ALM said the average losses of Lloyd's Names have been less than that of the corporate members of Lloyd's, "particularly those financed by international insurance companies from the U.S.A. and Bermuda."

The average increase for individual Names, both limited and unlimited, will be from ?763,000 ($1.2 million) in 2002 to ?924,000 ($1.5 million) in 2003, the ALM said.