Observer At Large Analysis From London--Lloyd's Still There.

• Author: Zinkewicz, Phil
• Position: LOOKING BACK

You wouldn't know it from reading the head-lines in the general press or from watching television reports such as one that was aired on "60 Minutes" some time ago, but Lloyd's of London is still there. The large futuristic building in London's financial district, which so many underwriters, brokers and others called a monstrosity when it was first constructed, still houses a formidable insurance marketplace. Moreover, despite all the problems Lloyd's has experienced in recent years, which have to some extent called into question its position as the "premier" insurance marketplace of the world, the fact it that no other insurance market has yet to step in and assume that status. True, Bermuda is making a valiant effort, but that marketplace has got to overcome its image of being a virtually unregulated captive insurance arena before it can step into the ring to challenge Lloyd's place.

The most recent announcement to come out of Lloyd's, of course, was quite disturbing. Lloyd's reported a (pounds) 2.048 billion loss for the 1991 closed underwriting year of account. [Insurance Advocate, May 21]. That comes on top of the huge losses earlier reported, giving a total loss of [pounds sterling]7 billion for the four years from 1988. Add to that dismal account the bad publicity Lloyd's has already received as the result of prolonged litigation instituted by investors ("names") over previous losses, and it's not difficult to come away with a perception of Lloyd's as battered and bleeding.

But Lloyd's, while it may be up against the ropes, is by no means down for the count or even on its knees. In an interview in London with this writer. Lloyd's chief executive officer, Peter Mid-dleton, put the Lloyd's picture into perspective. "There is no question that the losses reported are severe and most unwelcome." said Middleton. "But it must be remembered, and I think people are finally beginning to understand, that the word 'loss' as it relates to the Lloyd's market has a different meaning than it does when applied to insurance companies."

Middleton said that the principal features of this most recently reported loss are increases in Lloyd's reserves for prior years of account of almost [pounds sterling]1 billion and a 34 percent improvement in the pure underwriting result compared with a year earlier. "In terms of those increased reserves, that means that Lloyd's is better reserved for the future than any other market." said Middleton.

Furthermore, there...