Only 41 Irish people are now "private names" in the Lloyds of London insurance market, half the number registered in 1998. Heavy losses in recent years have discouraged many wealthy people from continuing to accept unlimited personal liability for the insurance risks they underwrite.

The total number willing to remain as private names in the market has fallen by 13 per cent this year to 2,490, according to the London-based operation. The number of private names has fallen sharply over the last 14 years. In 1988, there were a total 34,000 names of which 367 were Irish names, according to a Lloyds spokeswoman. The latest fall in numbers has come despite sharp increases in insurance premiums, which should help improve underwriting results this year.

Private names at Lloyds carry unlimited liability for the risks they underwrite. Many names have lost heavily in recent years as a result of huge claims following natural and man-made catastrophes. In December the market, which operates a three-year accounting period, projected losses of £1.67 million sterling (€2.69 million) for 1999 and £1.49 million for 2000. The 2000 figure included provisions of £650 million related to World Trade Centre claims but the bulk of these claims will come in the 2001 accounts. Lloyds is facing estimated claims of £1.9 billion from the terrorist attacks on the US.

Private names take the risk of unlimited losses in return for potentially hugh profits in good years when claims are low. In 2002, a new name must have substantial readily realisable personal wealth (separate from their main residence) of £350,000 to join the market.

A spokesman said many of the members who decided not to remain as private names this year have stayed in the market as members of "name cos" or other vehicles through which they can continue to underwrite risks but can limit their liability. The number of these limited liability vehicles has increased by 39 for this year to 993.

Despite the fall in the number of private names the capacity (or amount of business) Lloyds can underwrite has risen by about 12 per cent to £12.3 billion because of the increase in corporate capital. With just about 18 per cent of the market's capacity now held by private names, Lloyds has set up a strategy group to examine how the 300 year old market is organised.

Lord Mount Charles, who has been a private name for some 25 years, said he intended to remain a name this year and had increased his underwriting capacity by some 5 per cent. "I still underwrite a substantial line of business but it is less than a couple of years ago. I have a broad-based exposure through a number of syndicates and do not have a high exposure to direct aviation," he said.

He said 2001 was "a disastrous and frightening year for private names". After the events of September 11th, many names got six weeks notice from the US authorities that they were requited to lodge in the US a cash percentage of the estimated claims against their syndicates before any claims were made, he explained.

"This put a considerable strain on the cash-flows of names and some may not be in a position to continue to trade but it is the nature of the business. I take the view that September 11th was extremely damaging to names. But premiums are rising, dramatically in some sectors, and insurers are more selective about the risks they accept.

"The bottom line is that minds have been concentrated - nobody can remain indefinitely in a market writing unprofitable business," he said.