Lloyd's is expecting to pay out at least £100m from its central fund in 2003.
The money, which is to be given to policyholders making claims from the World Trade Centre disaster, will force Lloyd's to draw on its central fund reinsurance for the first time.
In 1998, Lloyd's took out a five-year reinsurance policy on its reserves. The central fund was estimated to contain £323m cash at the beginning of this year. It aims to protect policyholder's interests should a syndicate be unable to pay a claim.
Benfield Grieg broked the risk and Hannover Re, Swiss Re, Employers Re, The St Paul Companies, XL Mid Ocean Re and Chubb Corporation will insure Lloyd's fund.
The policy is triggered when over £100m is paid out from the central fund in any single year. It was originally taken out to give the 300-year-old market a stronger security rating and to protect its capital providers.
Lloyd's spokesman, Adrian Beeby, said: "We are projecting in 2003 over £100m is going to be drawn as losses from the World Trade Centre will take some time to go through."
He added Lloyd's intends to call on only a "small proportion" of its reinsurance policy.
Lloyd's will also be strengthening the central fund next year. In addition to a 1% contribution of capacity, syndicates will have to pay 2% of their premium income.
Beeby said: "Our target is to have £700m in the central fund by the end of 2003."