Gooda risks labelled unclear: Underwriter tells court of impression of 'pretty safe bet'
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Your support makes all the difference.STAN Andrews, a former Gooda Walker underwriter, told the High Court that names on his loss-making Lloyd's of London syndicate 298 had not received any written indication of the high-risk nature of his business.
Giving evidence at the hearing of a pounds 629m damages claim brought by 3,095 investors in the Gooda Walker syndicates, Mr Andrews said of his syndicate: 'I thought it was a pretty safe bet, to be honest. I am a lead name.'
He said he thought the indication in his annual reports in the mid-1980s that the syndicate had adequate reinsurance protection was 'a true and fair comment.'
Mr Andrews said his syndicate, specialising in catastrophe reinsurance, was high-risk but his perception was that the reinsurance cover he bought had made it medium- risk. Jonathan Gaisman, for the names, asked if Mr Andrews agreed that his perception was wrong. 'It is proven wrong, correct,' Mr Andrews said.
Mr Andrews agreed that the published accounts of the syndicate had never specifically stated that it was a catastrophe excess-of- loss syndicate. He said Lloyd's agents had been aware of the kind of business it wrote.
Syndicate 298's cumulative losses, including claims from the Piper Alpha oil rig explosion, Hurricane Hugo and the Exxon Valdez disaster, had reached pounds 332.5m by the end of 1993.
Mr Gaisman said syndicate 298's aggregate exposures had increased by about 20 per cent between 1988 and 1989. He asked: 'Did you intend these aggregate increases or did it just happen?' Mr Andrews said: 'I didn't realise they had reached these levels.'
Mr Andrews said he did not record the syndicate's aggregate exposures until April each year, after the majority of its business had been written.
He had been surprised by the size and pattern of claims that came through after the Piper Alpha catastrophe in July 1988. A large number of the claims had emerged from a category of business he had classified as low-risk. Mr Gaisman said: 'It shows you did not know your book of business as well as you thought you did?' 'No,' Mr Andrews said.
The hearing continues today.
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