LLOYD'S EXPECTS SHIFT IN SOVIET INSURANCE

LLOYD'S EXPECTS SHIFT IN SOVIET INSURANCE

The Soviet Union's move away from a totally state-controlled insurance industry to one with free market competition should make significant strides by the end of this year, Murray Lawrence, the chairman of Lloyd's of London, said Thursday.

Lloyd's is proposing the creation of a country management committee of underwriters and brokers to work closely this year with the Soviet authorities.Returned from a week-long fact-finding mission to Moscow, Mr. Lawrence observed that the scale of the work needed to bring the Soviet insurance infrastructure up to Western standards in this time scale was "daunting."

During its visit to the U.S.S.R., the Lloyd's team announced that it is

discussing with Ingosstrakh the possibility of providing reinsurance cover for Soviet launches of 10 commercial satellites planned for 1992. The Soviet Union's broader moves toward a more market-oriented economy, coupled with its increasing interest in joint ventures with foreign companies, are forcing rapid changes in insurance to meet these needs.

Mr. Lawrence said his impression after meeting businessmen and officials

from the Soviet Finance Ministry was that many of them want more joint ventures launched, but only when the infrastructure, such as insurance and banking, is up and working.

However, "there is a tremendous amount of work to be done" before this can be achieved in the insurance sector, he emphasized. There are no rules for licensing insurance companies, no accounting standards and no basic concept of insuring private property, in a country where almost everything is state owned, he said.

Yet talks with government officials and the heads of the two state insurance companies, Ingosstrakh and Gosstrakh, convinced Mr. Lawrence that the new regime is very keen to change and hopes to have the infrastructure of an insurance industry "well advanced or in place by the end of the year."

Mr. Lawrence said areas where Lloyd's could offer the Soviets help includes devising policy forms, rating risks, improving loss prevention and safety precautions and staff training. Lloyd's currently handles Soviet marine and aviation business worth about $5 million a year.

Another member of the Lloyd's team visiting Moscow was Richard Hazell, a leading non-marine underwriter. He said Thursday that he believed Lloyd's could play a "substantial" role in insuring the growing number of joint venture operations starting up in the U.S.S.R.