RISKY BUSINESS: An Insider's Account of the Disaster at Lloyd's of London [Hardcover]

Elizabeth Luessenhop (Author), Martin Mayer (Author)

Book Description

Publication Date: November 13, 1995 | ISBN-10: 0684197391 | ISBN-13: 978-0684197395

In this fascinating insider's account, an American woman who became an investor alleges that irresponsibility, incompetence, greed, and fraud at Lloyd's, the world's most glamorous insurance enterprise, have caused the company to lose $12 billion in the last ten years. Lloyd's of London is not simply an insurance company; it is a society comprising thirty thousand Names (roughly 10 percent of whom are Americans) - private individuals like Elizabeth Luessenhop who accepted the risk of unlimited liability and pledged all their wealth to backing the insurance policies written by Lloyd's. The beauty was that the Names didn't have to put up any money to receive their profit share. As long as the premium calculations were sound, everybody prospered. But the 1980s were bad years for Lloyd's - and for the Names who backed its business. It was also a time when the Society of Names grew by 50 percent to cover the disastrous losses the company was beginning to incur. Risky Business, written with veteran financial writer Martin Mayer, is a detailed account of how the mismanagement of Lloyd's has affected thousands of American investors who, like Luessenhop, sought low-risk, long-term security. Luessenhop and Mayer take us inside a unique business institution and show us that the ramifications of a possible Lloyd's failure will be severe - and felt worldwide.

Editorial Reviews

From Publishers Weekly

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.
Copyright 1995 Reed Business Information, Inc.

From Library Journal

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.
Copyright 1996 Reed Business Information, Inc.

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Product Details

• Hardcover: 352 pages
• Publisher: Scribner (November 13, 1995)
• Language: English
• ISBN-10: 0684197391
• ISBN-13: 978-0684197395
• Product Dimensions: 9.2 x 6.1 x 0.9 inches
• Shipping Weight: 1.6 pounds (View shipping rates and policies)
• Average Customer Review: 2.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #3,044,293 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

1 of 3 people found the following review helpful:

2.0 out of 5 stars Read this book after Ultimate Risk, November 25, 2007

By 

kristopher "K. Stockberger" (Houston, tx, United States) - See all my reviews
(REAL NAME)   

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This review is from: RISKY BUSINESS: An Insider's Account of the Disaster at Lloyd's of London (Hardcover)

If you work in the liability insurance industry, this book provides an interesting history of lessons (to put it mildly) that industry learned not too long ago.

The author gives a first hand account of a near death experience for the Lloyd's insurance market. The book's strength is its ability to give the reader the experience of becoming an investor (Name) in the Lloyd's insurance market. Investors made endless wealth at Lloyd's for centuries, often without tying up much of their own money.

But I recommend starting with another book on this topic, Ultimate Risk. Ultimate Risk is better organized than Risky Business, and lays out the history, problems and consequences of the under the table business dealing, asbestos liability debacle and environmental liability debacle that nearly brought the grandeur of Lloyd's to its knees, and brought many of its investors to their untimely deaths.