Lloyd's is turning the corner, says Middleton

PETER MIDDLETON, Lloyd's chief executive, said the market's reserves were robust and losses for 1991 would be an improvement on the previous year, writes Diane Coyle.

'We're turning the corner at Lloyd's. Outside analysts share our view that 1993 should be a very profitable year. And 1994 is shaping up well too.'

In a speech last night to the American Association of Managing General Agents in Florida, Mr Middleton said the pure underwriting result for 1991 would be much better than the previous year's pounds 937m loss. Lloyd's is to announce the full results today.

The biggest area of total losses, which reached pounds 2.9bn in 1990, comes from adding to reserves to cover new claims on policies written many years ago.

Mr Middleton said Lloyd's would announce a further boost to reserves to cover long-tail liabilities, mainly arising from asbestosis and pollution, on top of the dollars 3bn already added.

Critics have suggested that these claims could rapidly exhaust reserves.

Mr Middleton said: 'I am not content to rely on some of the more apocalyptic predictions from outside observers.' He anticipated a 'politically acceptable' answer to the question of allocating the costs of cleaning up pollution in the US. The market's reserves put it in a stronger position than other insurers to meet long-tail claims.