British insurer increases loss estimate
Bloomberg News
Lloyd's of London last week widened its estimated 1999 loss to 1.39 billion pounds ($2 billion) from 1.1 billion pounds after companies operating in the world's largest insurance market faced the most expensive year for catastrophe claims. It estimated a loss of about $1 billion in 2000.
Bloomberg News Service
Lloyd's, which writes about 5 percent of the world's reinsurance, faced rising claims in 1999 from disasters including storms in Europe and Hurricane Floyd in the United States. Claims cost the insurance industry about $31 billion that year, according to Swiss Reinsurance Co.
A car like this one, which goes 763 mph, as well as driver Andy Green, was insured by Lloyd's of London. Last week, the insurer increased its estimated losses for 1999.
"1999 is widely acknowledged to represent the low point of the global insurance market, and Lloyd's results reflect those conditions," the market said in a statement sent to news agencies. Earnings are reported three years later to allow syndicates to settle claims. Estimates are given in the interim.
Disasters cost the insurance industry $11 billion in 2000, almost a third of the previous year's figure, Swiss Re said.
Founded in Edward Lloyd's coffee in shop in the late 1680s as a way for merchants to trade shipping news, about 75 percent of companies in the FT-SE 100 Index and more than 80 percent of those in the Dow Jones Industrial Average have policies at Lloyd's.
Companies operating at the glass and steel building in London's Lime Street insure everything from gourmet Egon Ronay's taste buds to Formula One motor-racing world champion Michael Schumacher. Still, insuring ships, cargo, airliners and property generates most of the revenue at Lloyd's.
The following is a list of some of the more unusual risks insured by Lloyd's:
• Monster Risk: Cutty Sark Whisky offered 1 million pounds to anyone who could capture the Loch Ness Monster alive. The company took out a policy at Lloyd's to cover the liability.
• Cross-Channel Tub: A 20-year-old merchant navy officer during the 1970s sailed from Dover to Cap Gris Nez in France in a sea-going bathtub. He insured the tub for 100,000 pounds. The Lloyd's underwriter accepted the risk on condition the bath plug stayed in at all times.
• Spider Cover: Lloyd's covers an Australian fumigation company that clears houses of poisonous spiders — which mainly live under toilet seats — against the possibility of having to payout householders a cash sum if they're bitten while the spider is being removed.
• Star Cover: Bruce Springsteen insured his voice for 3.5 million pounds. Angie Dickinson and Jamie Lee Curtis each had their legs insured for $1 million at Lloyd's. The market has insured actors including Elizabeth Taylor, Frank Sinatra and Richard Burton. It also has covered rock stars including Elton John, The Rolling Stones, The Eurythmics, and The Beatles. Lloyd's paid out several million pounds in the late 1990s when Rolling Stones' guitarist Keith Richards broke a finger while on tour.
• Largest Cigar: The world's largest cigar, which was 12.5 feet long, was insured for almost 18,000 pounds. The cigar, rolled to celebrate a new brand, took 315 hours to make and would require 339 days and nights to smoke.
