A swingeing company-wide review at reinsurer PX Re has resulted in Lloyd's syndicate 1224 ceasing to accept new business and renewals.

The review, which will continue for an indefinite period, has come about because PX Re has suffered heavy losses.

In the second quarter of 2000, the company reported a £15.7m after tax loss, compared with £3.3m the previous year.

A source within PX Re claimed the company's poor performance had caused a “highly sensitive” relationship with ratings agencies AM Best and Standard & Poor's.

Peter Butler of syndicate 1224 said: “We are not accepting new or renewal business. PX Re is conducting a review of all its operations.”

But he denied the capital loading placed on the syndicate by Lloyd's had been a reason for the new-business freeze.

“Our funds at Lloyd's on open years are currently higher than the funds at Lloyd's we would need on our risk based capital loading plus 20%, so capital loading is not an issue,” he said.

News that 1224 is no longer accepting renewals or new business comes at an embarrassing time for

PX Re.

Last week, some reports claimed the reinsurer was planning to bail out of Lloyd's just four years after entering the market.

The claims prompted PX Re to issue a statement that said: “Contrary to recent rumours and articles, PX Re managing agency is not intending to leave the Lloyd's Market and to that end has been working tirelessly with Lloyd's regulators to implement the changes required for the loading to be lifted prior to its imposition on January 1, 2001.”

Syndicate 1224 was writing a wide-ranging £35m book, including personal accident, UK professional indemnity, employers liability and property.

In the 1997 year of account, 1224 suffered a 3.3% loss compared to 23% forecast for 1998.