Poor underwriting nearly killed Lloyd's of London, the insurance market's deputy chairman told a major insurance conference yesterday.

But Mr. Robert Hiscox said Lloyd's does not see Bermuda as competition, despite a huge influx of new catastrophe insurance companies to the Island in the last 18 months.

"We're not threatened by Bermuda because we are going to work together closely,'' Mr. Hiscox told more than 400 attendees of the eighth annual Coopers & Lybrand/ Hawksmere reinsurance congress.

Turning to Lloyd's troubles, Mr. Hiscox said: "If you don't underwrite properly, you die. We didn't underwrite properly and we very nearly died.

"We made some staggering losses for which there was absolutely no excuse. It was negligent underwriting. That's what they've discovered in the first court case. None of us are proud of the late eighties.'' Mr. Hiscox also lamented the absence of assistance for Lloyd's from the British Government.

"We must get a better lobby. We must have a voice for the London market,'' he said. "It is an international clearing house. It seems extraordinary that whilst we are still an international force in insurance, the Government does nothing for us.

"Why do we have to go on underwriting a very painful tax on our catastrophe profits and having to buy reinsurance elsewhere to smooth out the peaks and the troughs. "Why don't we have either low tax, equalisation reserves... All these things are possible.'' He said that the losses have been exaggerated, however, and that there were efforts afoot to remove the double-counting that escalated the estimates. He said some of the reported losses were as a result of heightening of reserves from the past.

The Lloyd's council is now seeking more centrally agreed upon control over how business is conducted by brokers and underwriters.

Mr. Hiscox was a member of the task force which investigated Lloyd's in 1991.

He was one of the first to understand the full extent of the fall that Lloyd's was heading for.

Lloyd's has shrunk from 401 syndicates to just 179 today.

"The worst period of my professional life was following that when I knew what was happening and what we were heading for, and not being on the Council of Lloyd's and watching nothing being done.

"It has been very satisfactory to be there and to be able to get changes made since 1993.'' The plan included introducing limited liability; establishing Newco, a new company to deal with long term liabilities; improved standards; getting central services uniform and getting costs under control.

Mr. Hiscox said that looking to 1996, the main objective would be to produce money and get the Names some return on their money. He said 1992 could be a break-even year.

Mr. Hiscox was elected to the Council of Lloyd's in 1993 and began directly serving as deputy chairman. He led the work on introducing corporate capital to Lloyd's last year.

He is chairman of the Hiscox Group which manages four syndicates at Lloyd's.

The Group has a members agency which manages the membership of Lloyd's of individual names and which acts as Lloyd's advisor to Hiscox Select, a Lloyd's investment trust, and which is involved with Hiscox Dedicated, a corporate member of Lloyd's supporting only Hiscox syndicates.

Lloyd's is getting onto a database which will include the details of every insurer who was ever on a policy with Lloyd's.

Mr. Hiscox said: "We are adding up all the liabilities to and from Lloyd's, worldwide. Some large reinsurers owe Lloyd's a lot of money.'' He referred to the Gooda Walker case which just ended in Britain, with the Judge pointing to negligent underwriting.

Mr. Hiscox said: "I find it is good news, for clarity. We obviously needed to know what the judiciary thought was negligent underwriting. That is one step closer to hopefully getting a settlement more easily.

"The trouble with getting a settlement is that the Names are persuaded that they have millions and millions to go for.'' Lloyd's is looking at new capital requirements and is anticipating more and more direct business. They will seek more corporate capital. By using information technology, they will attempt to get closer to the clients, instead of just the brokers.

They will seek more market unity and although he admits long-standing reservations about mutualisation, the market will continue to see successful members backing those who are failing, but with a different agenda.

He said of the 1980s: "We were paying each other's losses, yet there was no quality control.'' NO COMPETITION -- Lloyd's wants to work with Bermuda insurers, says deputy chairman, Mr. Robert Hiscox.