BBC News 2001-8-30

The dot.com collapse and a Brazilian oil rig disaster have combined to squeeze the world's oldest insurer, Lloyd's of London. The insurance market has been forced to increase its projected loss for the last two years to £2bn ($2.9bn).

Lloyd's racked up some of the biggest losses in the UK's corporate history in the 1980s and early 1990s because of hefty payouts on claims that including natural disasters and asbestos-related health issues.

Now the bankruptcy of a host of dot.com firms, and a very expensive oil rig disaster in Brazil, will once again push the firm deep into the red in 1999 and 2000.

Fewer catastrophes

The market has revised up its loss for 1999 to £1.4bn ($2bn), its biggest loss since 1990.

"1999 is widely acknowledged to represent the low point of the global insurance market and Lloyd's results reflect those conditions," the insurer said in a statement.

But Lloyds also noted that trading conditions are now improving.

With fewer catastrophes in 2000, the market projects losses of £694m for that year.

And last week, the Association of Lloyd's Members forecast the market would return to profitability in 2002.

Lloyd's reports its results with a three-year time lag and final figures for 1999 are expected next year.

-- PHO (owennos@bigfoot.com), August 30, 2001