Sunday Times, July 14, 2002, sec. 1, p. 6

Terror attack costs first lady of Lloyd's £2m

Maurice Chittenden

THE first lady of Lloyd's has had to pay out nearly £2m for the terrorist 
attack on the World Trade Center. Lady Rona Delves Broughton, a colourful 
socialite who is chairwoman of the insurers' high premium group of "names", 
is one of Britain's biggest financial losers from the September 11 outrage. 

She is among nearly 2,500 names who have had to dip into their pockets to 
pay for the loss of the twin towers in New York. Corporate investors have 
borne the brunt of Lloyd's £1.98 billion losses from the attack but most 
names, grouped together in 86 syndicates, have lost an average of £70,000. 

Delves Broughton has had to suspend renovation work at her country home, 
the 18th century Doddington Hall set in 800 acres in Cheshire, and has 
taken out a bank loan using her £2m home in Kensington, west London, as 
collateral. 

With an estimated £10m still invested at Lloyd's, she is, however, hopeful 
of recovering her losses over the next few years. "I'm a Lloyd's lady," she 
said yesterday. "There is no going back now. We have to go through the bad 
times." 

She is the widow of Sir Evelyn Delves Broughton, whose father Sir Jock was 
acquitted of the murder of his wife's lover, the Earl of Erroll, in Kenya's 
notorious Happy Valley murder case in the 1940s, on which the film White 
Mischief was based. 

Her stepdaughter is Isabella Blow, the style guru and former Sunday Times 
fashion director. 

Delves Broughton, 61, whose husband died in 1993, is a non-executive 
director of several leading companies including the Luxury Brands Group, 
Hardy Amies and Wiggins. She will be able to set off her £2m payment at 
Lloyd's as a tax loss against other income. 

She became an underwriter at Lloyd's in 1976 after her husband took her to 
Ascot and she asked who owned the Rolls-Royces and Bentleys near the 
stands. "They're all members of Lloyd's," he replied. She drives a three-
litre Audi. 

Another loser is Sir William Arbuthnot, the Eton-educated baronet and older 
brother of a former Tory defence minister. Arbuthnot, who is vice-chairman 
of the high premium group, said last week: "I hope Lady Rona, for her sake, 
is exaggerating her losses, but she underwrites more than most people do. I 
don't discuss my own individual position. We don't hold post mortems into 
our own losses or, indeed, into our own profits when they occur." 

However, the high premium group is planning a meeting to discuss how to 
make its position more secure within Lloyd's. 

Lady Archer, who once defeated Delves Broughton in an election for the 
council of Lloyd's, had resigned as a name before the terrorist attack, but 
has still suffered a loss because of the way Lloyd's accounting system 
works. "Everybody who is in the same boat as me has lost something," Archer 
said yesterday. "It seems slightly strange." 

The ceiling of losses is different for each syndicate, depending on whether 
they offset their potential losses by reinsuring some of their risk. The 
350 members of the high premium group all have to agree to underwrite a 
minimum £1m of insurance before they can join. The annual fee is just £175. 

The total losses to the world insurance market of the World Trade Center 
attack is estimated at between £25 billion and £50 billion, far exceeding 
the previous highest insured loss of £15 billion from Hurricane Andrew in 
1992. But Lloyd's requires all its syndicates to provide regular estimates 
of the impact of imagined "realistic disaster scenarios". The insured loss 
of an earthquake hitting Los Angeles is put at £37 billion. 

A Lloyd's spokesman said last week: "We cannot give out the details of 
individual names, but most people will have lost money because of September 
11. It hasn't affected those syndicates involved in motor insurance, but 
the vast majority of the others will be paying towards September 11. 

"We learnt a big lesson from several disasters in the early 1990s. Risks 
are held much more broadly across the market, but it does mean that 
virtually every syndicate has been affected." 


Additional reporting: Rachel Dobson