Lloyd’s May Issue Cash Call Next Week

February 1, 2002

The London insurance market is awash in rumors that Lloyd’s may issue another cash call sometime next week in order to raise additional funds to help pay the estimated $2.7 billion in claims resulting from the attacks of Sept. 11.

Lloyd’s Media Relations spokesperson Sara Chorley said that, “yesterday [January 31] was the last day for the syndicates to tell us whether they need one [a cash call] to make good on particular losses.”

She explained that each syndicate was responsible for its own accounting, and that the results would probably be made known next week, and a decision taken at that time. Under Lloyd’s procedures cash calls are made on a quarterly basis. The last one in October assessed members a total of £780 million ($1.1 billion), directly attributed to the WTC losses.

Chorely was unable to comment further on the possibility of a second cash call, but it appears likely. In an announcement last December A.M. Best stated that it “anticipates that further cash calls of approximately GBP 500 million [$705 million] will be necessary at the end of March and that these will be successfully collected.”|”lloyd’s, may, issue, cash, call, next, week

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