Lloyd's motor syndicate Octavian 1228 is under review by its new American owners, Markel International, after suffering heavy losses.

But the syndicate has denied rumours that it will ultimately lead to the syndicate being placed into run-off.

Markel managing director, Reg Brown, admitted 1228 was under the microscope, but said the move was part of a company-wide review by the American insurer.

He said: “The future of all our syndicates is being looked at. My own syndicate, 702, is being looked at. But no decision has been taken – or is imminent – to place any syndicates into run-off. We are nowhere near that stage yet.

“Markel have only just acquired the business and it is going to take time. They are reviewing everything, so there is no difference between 1228 and any other syndicate.”

Syndicate 1228 has struggled in the face of the severe motor market conditions, reporting a £7.37m loss for the 1997 year of account, on gross written premiums of £28.7m.

The syndicate's projected losses for 1998 are expected to deteriorate to £15.8m after writing a £62.2m book in premium income.

A source close to Markel told Insurance Times: “The Americans have a culture of looking at things and closing them if they are not making money. My understanding is that Markel will soon announce that Octavian's motor syndicate [1228] will be put into run-off.”

But Octavian 1228 underwriter Stephen Butler hit out at the claims.

“I believe your source is speculating. I can only say that no decision has been taken and our capacity for 2001 of £57m has already been confirmed by Lloyd's,” he said.

Deputy underwriter Alan Santry added that the syndicate had been working to improve its profitability over the past year.

He pointed to the 1228's withdrawal from the private hire high street market late last year, and ongoing restructuring of all the syndicate's lines of business.