Ultimate Risk: The Inside Story of the Lloyd's Catastrophe [Hardcover]

Adam Raphael (Author)

Book Description

Publication Date: August 24, 1995

Presents a behind-the-scenes account of the financial crisis afflicting the world's largest and most famous insurance company, Lloyd's of London, involving unpaid claims, unprecedented natural disasters, and financial mismanagement, costing billions. 25,000 first printing. Tour. IP.

Editorial Reviews

From Library Journal

Lloyds of London?the name has inspired confidence in the insurance world for 300 years. But after unprecedented natural disasters, billions of dollars in pollution and asbestos claims, 1980s speculation, greed, and fraud, Lloyds is in serious trouble. Investigative journalist Raphael traces the last two decades of woe at the company and spells out the future: if Lloyd's crashes, it will take many important U.S. insurance firms with it. Reminiscent of junk-bond, leveraged buyout stories like Connie Bruck's The Predator's Ball (Viking, 1989) and Bryan Burrough and John Heylar's Barbarians at the Gate (LJ 1/90), this work will shock and fascinate readers with its tales of greed and corruption. A best seller in the United Kingdom, it will be in demand in public and academic business collections.?Kris Swank, American Graduate Sch. of International Management Lib., Glendale, Ariz.
Copyright 1995 Reed Business Information, Inc.

Product Details

• Hardcover: 301 pages
• Publisher: Four Walls Eight Windows (August 24, 1995)
• Language: English
• ISBN-10: 1568580568
• ISBN-13: 978-1568580562
• Product Dimensions: 9 x 6.8 x 1.2 inches
• Shipping Weight: 1.1 pounds
• Average Customer Review: 3.2 out of 5 stars  See all reviews (5 customer reviews)
• Amazon Best Sellers Rank: #454,948 in Books (See Top 100 in Books)
  • #68 in Books > Business & Investing > Industries & Professions > Insurance > Business

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Customer Reviews

Most Helpful Customer Reviews

4 of 4 people found the following review helpful:

4.0 out of 5 stars Fun and interesting expose about a mysterious world, July 21, 1997

By A Customer

This review is from: Ultimate Risk: The Inside Story of the Lloyd's Catastrophe (Hardcover)

Excellent introduction to Lloyds, the incestuous relationship among the insiders, and how the insiders used their superior knowledge coupled with the myths surrounding historic Lloyds to dupe individuals into becomming Names. If you're in the business, this book has a lot of dirt about a lot of folks. A good read

2 of 2 people found the following review helpful:

5.0 out of 5 stars An omen of things to come, August 10, 2010

By 

Luc REYNAERT (Beernem, Belgium) - See all my reviews
(REAL NAME)   

This review is from: Ultimate Risk: The Inside Story of the Lloyd's Catastrophe (Hardcover)

Adam Raphael delved deeply into the Lloyd's insurance catastrophe, where individuals (the `Names') guaranteed with their personal wealth unlimited financial risks: `Thousands of individuals with moderate means were encouraged to gamble their home away.'
The losses were staggering: `To chalk up losses of more than ' 8 billion in five years (1988-1992) and pauperize, if not bankrupt, as many as two in five of those who provided the market's capital, is an achievement unmatched since the South Sea Bubble.'

Risk, no disclosure, fraud
The losses were provoked by underestimating the risks involved (asbestos, environmental pollution), insufficient reserves for long-tail contracts (contracts were closed after three years and risk covered by `bad' new ones), spiral losses through `reinvestments' and blatant fraud (`some underwriters cheated the `Names' by diverting funds to their own benefit, others defrauded them by funneling the best risks into baby syndicates for their families and friends').

Ultimate winners
The financial catastrophe became a real goldmine for the lawyers. The insurance knots proved to be incestuous. Some `Names' sued themselves because they had stakes in antagonistic syndicates. A brand new job, insurance archaeologist, had to be invented to dig up old liability policies.

An omen
This capital evaporation was the first financial scandal that broke out in the 1990-2010 period. It contained the ingredients of the global banking crisis: pumping up revenues (trying to make money by moving money around), hiding and piling risk upon risk, speculating against the company's own products (baby syndicates) and cheating the capital providers (the `Names').

Adam Raphael wrote an ultimate verdict on corporate greed, blatant misconduct and total neglect of the ultimate investors.
This book is a must read for all those interested in Western financial history.

1 of 1 people found the following review helpful:

3.0 out of 5 stars This Book Just Doesn't Get it Done, April 20, 2009

By 

Jgpitt19 - See all my reviews

This review is from: Ultimate Risk: The Inside Story of the Lloyd's Catastrophe (Hardcover)

Americans looking for an incisive understanding of the every day business of Lloyd's may be disappointed by this book. The author doesn't do a good job of explaining technical terms, like "unlimited liability" or "capacity." I found myself re-reading certain chapters three or four times to fully comprehend some of the technical terminology. I don't believe the subject is too technical to undersand- it seems the author simply glossed over significant details and didn't invest the time to lay out his descriptions in an orderly manner (maybe in Britain these things are generally understood). I selected this book in the hope of finding a book with a good historical overview and top notch technical business descriptions (like "Barbarians at the Gate"). This book doesn't come close.

With the above said, the author did do a good job describing the problems of asbestos insurance liability, and CERCLA liability. And, he does an excellent job of outlining the financial ruin heaped on "Names" who didn't have an insider advantage to the Lloyd's market in the '80s and '90s. If you are more interested in these aspects, the book may be for you.