Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • March 2015
03

Critical developments at Lloyd's in the early 1990s

Open-access content Wednesday 25th February 2015 — updated 4.50pm, Tuesday 14th April 2020
2

A very interesting interview with Andrew Duguid about Lloyd's on the brink in the 1990s appeared in the February issue of The Actuary. I would like to expand upon it. A link to my more detailed article can be found at the end of this letter.

The problems at Lloyd's started in the early 1980s, with the increasing emergence of claims from the USA relating to asbestos and pollution. Following this, an unprecedented number of large catastrophe claims occurred in the late 1980s and early 1990s, thus compounding the general situation and the poor financial results for many syndicates. There was uncertainty, as Andrew suggests, as to the individual reinsurers or syndicates that would ultimately pay their shares of these losses after they had been through the LMX (London market excess of loss) claims spirals.

The above two issues should also be viewed together with the background of insufficient reserves and significant losses arising from several catastrophes, and very low premium rates and loose terms and conditions from the first half of the 1980s, from which losses were still emerging.

The scene at Lloyd's was set for the largest, and perhaps the most important, actuarial exercise ever performed. This resulted in the formation of NewCo, later renamed Equitas. UK actuaries had been involved in non-life insurance for many years prior to this of course, and we were well equipped for this exercise. Once Equitas was up and running, actuaries became even more involved with reserve opinions for syndicates at Lloyd's. This involvement has continued ever since. However, is it now time for more useful opinions, including opining on alternative amounts of technical provisions with varying levels of confidence?

Lloyd's, and those working within the market, showed that they were robust and strong enough to survive these unique conditions of the early 1990s. However, adverse conditions will arise again at some future time. I firmly believe that the use of actuaries within the insurance industry has averted significant problems that have faced other financial institutions. It is essential that the last message in the article from Andrew is adhered to. We must adapt and stay flexible, or we will not survive.

Colin J W Czapiewski 18 February

See the full article accompanying this letter here.

This article appeared in our March 2015 issue of The Actuary .
Click here to view this issue

You may also be interested in...

2

Letters to the editor: Funding pensions and long-term care

Wednesday 25th February 2015
Open-access content
2

Letters to the editor: Drip-drop oil

Wednesday 25th February 2015
Open-access content
2

Honorary Fellow election 2015: voting opens soon

Wednesday 25th February 2015
Open-access content
2

400 Club survey results: members' communications and engagement

Thursday 26th February 2015
Open-access content
2

South-East Asia Study sessions

Thursday 26th February 2015
Open-access content
2

More to actuaries than meets the eye

Nick Salter advises that, like a 3D stereogram image, there is more potential to actuaries’ advice than meets the eye
Wednesday 25th February 2015
Open-access content

Latest from March 2015

2

Have your say: Council elections

The future of the profession depends on you – and, crucially, your vote, writes Derek Cribb
Tuesday 31st March 2015
Open-access content

Small firms want list of pension providers to avoid non-compliance

Nearly two thirds (61%) of firms with up to 250 staff would like a list of recommended pension providers that accept smaller companies, research has found.
Tuesday 31st March 2015
Open-access content

Nick Mann: A consummate professional and charming presence

The Actuary team was shocked and saddened to learn of the tragic death of our former colleague Nick Mann in an accident on London Underground at the weekend.
Tuesday 31st March 2015
Open-access content

Latest from small_opening_image

2

COVID-19 forum for actuaries launched

A forum for actuaries has been launched to help the profession come together and learn how best to respond to the deadly coronavirus sweeping the world.
Wednesday 25th March 2020
Open-access content
2

Travel insurers expect record payouts this year

UK travel insurers expect to pay a record £275m to customers this year as coronavirus grounds flights across the world, the Association of British Insurers (ABI) has revealed.
Wednesday 25th March 2020
Open-access content
2

Grim economic forecasts made as countries lockdown

A sharp recession is imminent in the vast majority of developed and emerging economies as the deadly coronavirus forces businesses to shut down across the world.
Tuesday 24th March 2020
Open-access content

Latest from missing_standfirst

news in brief

March news in brief

Paper: A Cashless Society in 2019 Cash is under pressure. A tense 2018 led to a tumultuous 2019: Facebook's announcement of plans to launch its Libra cryptocurrency with a consortium of companies united all regulators against the project.
Friday 28th February 2020
Open-access content
2

Forging new paths

The Terminator is coming!  At least that's one potential vision of the future, invoked by Boris Johnson at the UN last year while he speculated about artificial intelligence (AI). We can certainly debate how realistic that vision is, and what the possible timescales might be.
Friday 28th February 2020
Open-access content
2

Expert advice

This edition of the magazine focuses on data science and its applications, which will be a recurring theme for the IFoA.
Friday 28th February 2020
Open-access content

Latest from missing_teaser_text

Obituary: Ragnar Norberg

Thursday 1st February 2018
Open-access content
2

Obituary: Ted Belmont (1950-2017)

Obituary: Ted Belmont (1950-2017)
Wednesday 10th January 2018
Open-access content
2

Q&A: Sharad Bajla (Singapore)

Sharad Bajla is an actuary at Asia Capital Re in Singapore, and is originally from India
Wednesday 6th July 2016
Open-access content

Latest from 03

2

Have your say: Council elections

The future of the profession depends on you – and, crucially, your vote, writes Derek Cribb
Tuesday 31st March 2015
Open-access content
2

Event full of Eastern promise

The upcoming Asia conference marks a series of firsts for the IFoA, writes Derek Cribb
Wednesday 25th February 2015
Open-access content
2

Social unrest: a systemic risk

With the help of social media, civil unrest is a risk that has profoundly changed in nature, says Scott Kelly
Wednesday 25th February 2015
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Leading Insurer/Asset Manager – Pricing Actuary (Mortgages)

London (Greater)
Competitive
Reference
148750

Senior Consultant - Risk Settlement - Any UK Location - Up to £100,000 plus bonus

London / Manchester / Edinburgh / Remote
Up to £100,000 + Bonus
Reference
148832

Finance Transformation Actuarial student/Qualified Actuary

London (Central)
£50,000 - £75,000 depending on experience
Reference
148830
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ