Ultimate Risk

by Adam Raphael, Four Walls Eight Windows

In Ultimate Risk: The Inside Story of the Lloyd's Catastrophe, Adam Raphael has written a behind-the-scenes account of this still-unfolding disaster. The result in part of unprecedented natural disasters worldwide and huge numbers of asbestos and pollution claims in the U.S., this ultimate financial nightmare also stems from scandals ranging from skimming profits to conflicts of interest and outright fraud. Few have any idea of the scale of the Lloyd's crisis, which is comparable only to the savings and loan collapse in the U.S. One prediction is that the cost of cleaning up America - for which Lloyd's is in large part responsible, through its insurers in this country - could be as high as $1,000 billion, more than the combined resources of casualty insurers worldwide. If only a fraction of these claims are upheld by the courts and have to be met, the conclusion is inevitable: a number of very important insurance companies in the U.S. will go out of business. And if Lloyd's is unable to pay its U.S. claims - a distinct possibility - it will not be just the biggest financial collapse of the century: hundreds of thousands of American policy-holder claimants, among them the victims of asbestosis, will go unpaid.

Genres: Nonfiction, Finance, Biography

301 pages, Hardcover

First published September 1, 1994

Reviews

[Daniel Sanders · Rating 4 out of 5]

This may well be my nerdiest read yet, but I flew through this book as it’s a really interesting subject tackling the crises at Lloyd’s throughout the 1980s and 1990s. Has made me want to dig deeper into the topic, but alas there is not an extensive list of reads out there. The writing style feels a bit clunky in places and I think somebody with zero background would struggle with the terminology.

[Jennifer Collins · Rating 5 out of 5]

I read this in a day. I have a particular interest in this subject matter because of my line of work. This book is so well researched and so well written. It’s a human account of the story of Lloyd’s, focusing on the meltdowns and calamities up to 1994 which fundamentally shook Lloyd’s. As a lawyer, I’ve read many court judgments involving the characters in this book and the events discussed in this book, especially the LMX spiral and the litigation by the ruined Names. It was amazing to get the context for these important decisions. I couldn’t put it down!

[Aaron T · Rating 4 out of 5]

An interesting read from a historical perspective if you are interested in insurance or Lloyds.

[Drilling · Rating 4 out of 5]

I really enjoyed this book. I thought the writing and narrative was compelling for what could've been a very dry subject matter, and am surprised to see the broader reception of this book. The author did a good job of narrating Lloyds' veer towards disaster in the 80s with various syndicates exposure to asbestos / American pollution liabilities and interwoven reinsurance deals that only concentrated rather than disseminated the risks emanating from those liabilities.

The book falls short in synthesizing the outcome of the near collapse of Lloyds, and providing more context of how the issues were resolved. I would recommend this book if you're relatively new to insurance market and are curious as to how Lloyds works. It provides a good introductory framework for how the market worked in the 1980s as well as providing context to what led to its demise in the late 80s and early 90s.

[Gumble's Yard - Golden Reviewer · Rating 3 out of 5]

On the Brink: How a Crisis Transformed Lloyd's of London a more colourful, contemporary account written in 1995 exactly at the point when the Equitas project had started and corporate capital was being engaged but before the future of the Lloyd’s market was even close to certain. Entertaining and more like a novelisation – although lacking the internal perspective and benefit of hindsight.

[srdjan · Rating 2 out of 5]

The author has an axe to grind and an apparent disregard for chronological order. He also has a tendancy to repeat himself, hoping repetition will persuade. A pretty rough read, but the first few chapters about the history of Lloyd's are fascinating.

[Courtney Chase · Rating 1 out of 5]

This goes under the catagory of "wretched books I was forced to read in college". Only upside is that I know more about Lloyds of London than pretty much any civilian I've ever met. Redefines dry.