That a British institution as venerable as Lloyd's of London could face financial ruin was unthinkable. Yet the unthinkable came to pass, and the authors explain how and why in engrossing prose. After describing the rich history of the organization that insured the commerce of the British Empire and, later, the world, and explaining its unique structure, they document the factors that caused a $10 billion-plus financial disaster. External causes included American courts' expanding liability (e.g., in asbestos and oil spill cases). These combined with internal factors such as Lloyd's investors placing blind trust in the company's underwriters and accepting risks in return for the prestige and tax breaks of being ``Names'' (private individuals who pledged their wealth to back Lloyd's policies without having to put up money to get their profit share). This accessible book is for those with an interest in modern English history or the insurance industry. This is Luessenhop's first book; Mayer (Nightmare on Wall Street) is a financial writer. (Dec.)
Luessenhop, an investor in Lloyd's of London, and Mayer, a financial writer, present an insider's view of the recent financial calamity of the nearly 300-year-old insurance institution. The authors discuss the burden falling on the more than 30,000 "names'' (about ten percent of whom are Americans) who pledged their properties to back the insurance contracts stamped at Lloyds of London. Associating the cause of the disaster-a loss of $12 billion-with unacceptable management practices, the authors describe the horrendous conditions faced by Lloyd's backers, who are obligated to pay enormous and escalating claims under the "unlimited liability" agreements they agreed to uphold. The authors explain the legal and financial structure of the institution, point out the flaws that led to the crisis, and discuss the new framework introduced to keep the company in business. A subject of considerable interest to those involved in the international insurance industry, their work should be a fascinating business story for general readers. Recommended for public libraries and large business collections.-Ali Abdulla, East Carolina Univ., Greenville, N.C.
The recent financial turmoil at venerable insurance colossus Lloyd's of London has been well documented in the business press and by Jonathan Mantle in "For Whom the Bell Tolls: The Lessons of Lloyd's of London" (1993). While most of what has been written has been of interest primarily to the business and financial communities, this newest book additionally aims for the more casual reader. Even though Lloyd's huge losses have abated somewhat, its ongoing story of woe makes interesting reading. On the other hand, if one is, as is coauthor Luessenhop, one of Lloyd's more than 30,000 "names," the story of the company's $12 billion-and-still-counting losses is instead distressing. "Names" become members of the Society of Lloyd's and most had thought they would be sharing in the 300-year record of profit. Instead, they face unlimited liability for the insurer's losses and mistakes. Mayer is a veteran business author with more than 30 familiar titles to his credit, and he shapes this story based on Luessenhop's personal experience, tenacious research, and skillful interviewing.