Lloyd’s “Names” could double money in two years: Association

The Association of Lloyd’s Members (ALM) is telling the market’s “Names” they could double their money in two years in the current climate of profitability at the 300-year-old insurance market.
The Association’s “Lloyd’s Results Summary” forecasts individual members of the market, so-called Names, could make pure year profits of 20% of capacity for 2002 and 2003. This excludes any prior year deterioration, the ALM notes. With Names required to provide capital backing of 40% of capacity, this could produce return on capacity of 100%. The ALM notes that its profit forecast for individual members is higher than that forecasted for managing agents by Lloyd’s in April.
Part of the success of Names results from having posted lower than market average losses in 2001, according to figures from Moodys. The rating agency pegs Names’ losses that year at 14.5 % of capacity versus a Lloyd’s average of 18.6%. As well, Moody’s puts 2002 profits for Names at 15.2% of capacity, above the Lloyd’s average of 12.9%.
“It is easy to forget just how much money Lloyd’s can make when it is firing on all cylinders, and that Names do better than Lloyd’s corporates,” says Michael Deeny, chairman of the ALM. “The 2002 and 2003 years of account are likely to be very good for private capital at Lloyd’s.”