TIME EUROPE
WEB FILE - LLOYD'S OF LONDON
SPECIAL REPORT
From Max Taylor, Chairman of Lloyd's
Dear Sir,
The 21 February edition of TIME contained an article that reported on allegations of fraud which have been made against Lloyd's by a small group of disaffected Names. This article appears to have been stimulated by the upcoming case to be heard by the Commercial Court in London, under the title Society of Lloyd's v. Jaffray. The article makes no new disclosures and is one-sided, unbalanced and contains many inaccuracies.
These old allegations relate back to events which took place in the 1970s and 1980s and have been aired on and off over the last decade by a small minority of Names, yet no evidence of fraud has ever been produced.
The article also purports to comment on the current state of the market in saying that 'Lloyd's too is struggling mightily'. The independent rating agency Standard & Poor's disagrees, stating 'Lloyds is expected to outperform leading companies over the course of insurance cycles and this is evidenced by the attraction of the Lloyd's market'. Recently affirmed ratings by Standard and Poor's (A+, Strong) and AM Best (A, Excellent) further demonstrate the strength of Lloyd's security.
The article further asserts that Lloyd's 'is a shadow of its former self' and that Lloyd's 'capacity to write insurance is lower today than it was in 1990'. In fact, the Lloyd's market's capacity has remained constant over the period. The market's US permiums continue to grow, totalling $5 billion in 1999, and its share of the US surplus lines market is larger than that of any single US domestic carrier.
We expect to see further press coverage as the trial proceeds. Lloyd's does not believe that it is appropriate to engage in a detailed rebuttal of the allegations through the media, but will do so through the proper legal channels. Lloyd's is confident that the allegations will be rejected by the Court and will finally be put to rest. It is also confident that the market has a strong future and will build on its reputation as a world leader in insurance.
Yours sincerely
Max Taylor
Chairman, Lloyd's
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