The dispute between Lloyd's and six reinsurers over withheld payments to the central fund totalling £290m (£187m) highlights a deeper rift between insurers and reinsurers, according to reports.
The dispute between Lloyd's and six reinsurers over withheld payments to the central fund totalling £290m (£187m), highlights a deeper rift between insurers and reinsurers, according to reports.
A report in today's FT.com claims that the dispute has strained the relationship between reinsurers and insurers, which was already undermined by the impact of the massive losses caused by the 11 September attacks.
US research house, Williams Capital, speaking to the FT.com, said: "Stressed by a decade of mounting underwriting losses, waves of claims from insurers for prior-year losses and balance sheets weakened by lacklustre investment returns, reinsurers - especially the Europeans - have changed their claims-paying strategy."
Lloyd's started arbitration procedures against the reinsurers that have stopped making payments on a policy that covers the insurance market's customers.
However the research body claimed this highlights a wider issue - the scale of "recoverables" owed by reinsurers to insurers.
Martin South, chief executive of Zurich London said: "As primary insurers, we've been treated absolutely dreadfully by some reinsurers.
"People with whom we have a had a 20-year relationship have suddenly said, without any notice, that they are not prepared to cover certain classes of business."
