Lloyd's has increased the amount of money members should pay into its Central Fund, following market fears its reserves are becoming exhausted.
Every year, all Lloyd's members voluntarily pay an annual levy into the Central Fund.
These assets are used to provide policyholder protection for all liabilities should an underwriter fail to pay a claim.
At the end of 2000, the trust stood at £323m. But now market sources have speculated it is being rapidly depleted.
Fitch Ratings director of insurance, David Wharrier, said: “Rumours circulating in the market suggest that some corporate members are not willing to pay additional funds into Lloyd's once their own capital has dried up, particularly if their syndicates are no longer trading.”
Lloyd's has now decided to increase the amount a syndicate ought to contribute.
Last year, the Lloyd's Market Board envisaged payment should fall from 0.75% of a member's syndicate premium limit in 2001 to 0.5% in 2002.
In a bulletin to the market, Lloyd's director of finance and operations, Andrew Moss, said: “In light of actual and projected market results since 1997, the council has concluded it would be prudent for the standard contribution rate payable by all members for the 2002 year of account to be 1%.”
Earlier this year, Lloyd's committed to paying out for travel claims following the collapse of The Management Company (London).
The insurance intermediary is thought to have left thousands of people without travel cover after it issued policies bearing the Lloyd's name without authority.
The 300-year-old market has vowed to eventually reclaim that money, but Fitch has indicated other factors will drain the reserve.
“Early estimates suggest that losses amounting to £150m will go unpaid by certain members and will have to be paid by Lloyd's Central Fund should members not replenish their funds,” Wharrier said.
“We believe a significant earmarking of the Central Fund may lead existing members to reconsider their Lloyd's membership for 2002.
“This, together with Lloyd's syndicates' inability to forecast their results, does not inspire confidence.”
But Lloyd's spokesman Adrian Beeby denied there was cause for concern. “We have £323m in cash and investments and have reinsurance arrangements,” he said.
