Lloyd's warns syndicates to review capital requirements following weakening of pound

Lloyd's of London warns syndicates about exposure - Telegraph: "Luke Savage, the director of finance, risk management and operations at the world's largest insurance market has written to the 75 syndicates at Lloyd's, saying the strength of the dollar against sterling could have an impact on their business plans.

Much of Lloyd's business is agreed in dollars, although companies tend to set aside money in sterling to pay out for any potential claims. The letter states valuations of funds at Lloyd's are based on 'a common rate of exchange' of $1.99 to the pound. Nowadays, it is $1.52 to the pound.

'Since June, sterling has weakened considerably,' Mr Savage wrote. 'The purpose of this letter is, therefore, to highlight the need for businesses to review their exposures and associated capital requirements, particularly where capital is deployed predominately in sterling and hence there is a currency mismatch against exposures.'"