Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, April 30, 1993 TAG: 9304300413
SECTION: BUSINESS PAGE: B4 EDITION: METRO
SOURCE: DIRK BEVERIDGE ASSOCIATED PRESS
DATELINE: LONDON LENGTH: Medium
Lloyd's always has paid claims with money from wealthy investors who put their personal fortunes on the line in exchange for a share of any profits.
Investing in Lloyd's seemed like a sure bet in the days when a few extremely rich people could, in effect, lay the odds against shipwrecks. But it has turned to disaster in the modern era of ruinous lawsuits.
Amid billions in losses and fleeing investors, Lloyd's said the only way it can bring in new money is by letting people and companies into the market without risking everything they own.
"The alternative is bleak," Chairman David Rowland said. "Should membership and market not unite behind this plan, then Lloyd's may have no future."
Lloyd's also is trimming its payroll and taking steps to make its insurance syndicates more accountable for mistakes that prove costly to the investors.
Like many British institutions, Lloyd's is bound to tradition. But a changing world finally caught up with the insurance market that began during the 1680s in a coffee shop, known as the best place in London to pick up the latest shipping news. Big payouts for hurricanes, earthquakes, pollution and asbestos wiped out the fortunes of hundreds of the Lloyd's investors in the late 1980s.
Starting Tuesday, Lloyd's will invite limited-liability corporate investors into the market, meaning people or companies can invest but know in advance how much they would lose if disaster strikes.
The market's first-ever business plan will include rules to assure that insurance syndicates who lose investors' money can no longer hide behind a veil of bureaucracy.
\ UNUSUAL POLICIES BY LLOYD'S OF LONDON
Betty Grable, movie star of the 1930s and 1940s, was covered for her "million-dollar legs."
Cutty Sark whiskey offered a $1.57 million prize in 1972 to anyone who could capture the Loch Ness monster alive, protecting against a payout with a Lloyd's policy.
A Memphis, Tenn., radio station offered a $1 million prize in the 1980s to anyone who found Elvis Presley alive, and insured the prize with Lloyd's.
Lloyd's offered up to $3.9 million against property damage or $785,000 against death when parts of the disintegrating Skylab space station were falling to Earth in 1979. - Associated Press
by CNB