Lloyd's of London lost £1.031bn during 1998, due to underwriting losses, personal expenses and releases from prior year reserves.

The market's global results said the 1998 account was “characterised by losses in virtually every sector”. Major satellite losses, the Swissair tragedy, Hurricane George and the ailing motor market contributed to the losses.

Underwriting losses were £1.119bn, syndicates' personal expenses £302m and releases from prior year reserves £390m. Syndicates reported an average loss of 10.1% on capacity.

Lloyd's is now projecting an aggregate loss of £1.11bn on a capacity of £9.87bn for 1999, due to poor rating conditions across most classes of business and exceptionally high levels of catastrophe loss activity.

Chairman Saxon Riley said: “There is a sense of urgency in the market that actions need to be taken to address a number of key issues.

“These range from looking at how we can return to and maintain profitability to addressing the issue of recruiting and retaining the underwriting and managerial talent the market needs.”

Other concerns raised in the report include possible threats to future market performance as the market is exposed to high severity and low frequency risks.