Lloyd's Names want more time to pay

LLOYD's of London investors are demanding a breathing space before funding the second multi-million pound cash call within four months.

The insurance market, which faces a bill of more than £5.5bn over the New York attacks, is collecting £780m from corporate investors and the individual Names who underwrite its syndicates. But to meet US regulations, Lloyd's must shore up its American trust fund by a further £1bn.

It usually has to keep enough cash there to cover all expected US claims. But it has negotiated holding 60% of the total until next spring.

A cash call to make up the difference is due in January. But the Association of Lloyd's Members, which represents the 2,800 Names, wants it delayed for at least a month.

They argue that by then Lloyd's will have recovered some losses from reinsurance. It should also be benefiting from the post-11 September surge in premium rates. Some aviation premiums are said to have risen by thousands of%.

The Names hope this will reduce the size of the cash call. But Lloyd's says it is sticking to the January timetable.

There are still serious doubts about Lloyd's exposure to World Trade Centre losses. Legal action has been launched to establish whether there was one attack on the WTC or two. The result could double the bills insurers, including Lloyd's, thought they faced.

Twin Towers owner Larry Silverstein is to claim £2.5bn for each tower. SwissRe, which led a syndicate of about 20 insurance groups, wants a ruling that the assault was one incident, which would cap the total exposure.

The dispute highlights a worrying gap between the losses insurers say they face and those the victims are claiming.

So far, the expected claims declared by the insurance industry total £14bn. Munich Re and Swiss Re have given estimates of their losses that suggest a total bill of between £23bn and £45bn.

But an analyst calculated the overall range of loss estimates at between £17bn and £70bn because of 'huge uncertainties in calculating claims'.