Lloyd’s Loses $4.33 Billion, Most in 300-Year History; Anger of Investors Grows : Insurance: The figures for 1990 are higher than expected. Natural and industrial disasters of the late ‘80s are blamed.

Lloyd’s of London announced the largest loss in the insurance firm’s three centuries of history Tuesday amid a rising tide of indignation by its more than 30,000 investors--many of whom stand to lose a fortune.

Lloyd’s revealed that a record $4.33 billion was lost in 1990, higher than that forecast earlier this year and up sharply from the $3.05-billion deficit of 1989. Figures are three years late to allow outstanding claims to clear.

“It represents in every way the low point of Lloyd’s history,” Chairman David Rowland said.

Lloyd’s reported the results at its annual general meeting, attended by many of its investors, known as “Names.” Their personal wealth backs the market.

Thousands of Names--many already ruined, others facing financial hardship and bankruptcy--were told that the losses are more serious than predicted and average roughly $148,000 per investor.

Huge losses in 1990 stemmed from natural and industrial disasters in the late 1980s, including America’s Hurricane Hugo and the Exxon Valdez oil spill, as well as from severe European storms in 1990.

But the losses were compounded by many of the hundreds of Lloyd’s underwriting syndicates having insufficient reinsurance protection against the high-risk catastrophe business in which the firm specializes.

Thousands of Names in Britain and the United States are suing Lloyd’s underwriters, whom they blame for their plight. They claim that some Lloyd’s officials were guilty of negligence and fraud in placing investors in high-risk syndicates while the Lloyd’s insiders were investing in much safer endeavors.

In April, Rowland announced measures to try to save the venerable insurer from collapse by seeking corporate limited capital, ending the Lloyd’s tradition of unlimited liability for its investors. Lloyd’s has 32,000 Names, a third of whom have resigned from active underwriting in the last two years. But they remain liable for losses on syndicates they joined whose accounts remain open, because claims continue to come in.

It sometimes takes years in the insurance trade before the full extent of liability payouts for any given year are known.

In better times, the attraction for investors in Lloyd’s--once a model of financial security--was that they had only to pledge their funds to support syndicates but were able to invest the actual money elsewhere, thus “making their money work twice.”

A typical angry member at the Tuesday meeting was Alan Price, who warned that the Names could force the closure of Lloyd’s. “It is we, the 80% of external Names,” he said, “who will decide the future of the society. If closure is to our advantage, and it may well be so, then rest assured we will close it.”

He said the reason for the enormous losses is the fact that the underwriters of the 300 syndicates most hurt “accepted business at rates that were far too low to produce any hope of profits.”