Financial Times

June 6, 2012 5:26 pm

 

Death of fighter for Lloyds names

 

By Gordon Cramb

 

Alfred Doll-Steinberg, who has died aged 78, was an Austria-born chemical engineer best known for leading a battle 20 years ago on behalf of Lloyd's members, at the height of the biggest crisis to hit the London insurance market.

 

He lamented that at Lloyd's "the 300-year-old principle of uberrima fides "utmost good faith" started to be replaced by the principle of caveat emptor [buyer beware], as if you were buying a used car from Arthur Daley', the unreliable character from the television series Minder. Yet Doll-Steinberg's own role became caught up in controversy.

 

As chairman of the Gooda Walker and Wellington action groups in 1991-92, he represented as many as 2,500 "names" -- individuals who, in the hope of excellent returns in good years, pledged their entire fortunes to stand behind the insurance cover Lloyd's provided.

 

But after big asbestosis claims and calamities such as the 1988 explosion of the Piper Alpha oil rig in the North Sea, members of Gooda Walker and Wellington found themselves in two of the worst affected syndicates -- the groups of backers, agents and underwriters that made up the largely self-regulating market.

 

Doll-Steinberg became the most vocal "name" in the fight that ensued after almost GBP 8bn in losses threatened many with bankruptcy. He argued that the scale of the problem stemmed not so much from the actual disasters but from the practice of passing risks from one underwriter to the next using reinsurance, creating a "spiral of liabilities", with brokers and underwriters extracting a commission at every stage.

 

He helped to win a settlement that also led to a large-scale corporatisation of one of the City's most venerable institutions, and where companies with limited liability came to dominate the provision of cover. Individual members would no longer be allowed to stake assets "down to their last cufflink" and historic exposure was bundled into a vehicle called Equitas, now owned by Berkshire Hathaway, Warren Buffett's investment company.

 

Victory was tainted, however, by discord in the Gooda action group when it emerged that Doll-Steinberg and others on the committee elected to pursue the groups interests were seeking a preferential deal, in recognition of their efforts. He was ousted and the remuneration proposal abandoned.

 

Doll-Steinberg was born in 1933 into a Viennese family who fled to the UK five years later, settling in Nottingham. Gifted in mathematics and chemistry, Doll-Steinberg won a scholarship to Gonville and Caius College, Cambridge. He graduated with a double first.

 

He is survived by his wife Gerda, two sons and a daughter. His main professional interest was the design and economics of oil refineries and petrochemical plants. But it was as an outspoken private investor that he played probably his most catalytic role.

 

Reprinted from:

http://www.ft.com/cms/s/0/36b29d08-af66-11e1-a8a7-00144feabdc0.html