Editing Lloyd's of London (section)

===Late 1980s: Piper Alpha and the LMX spiral===
It has long been normal for one Lloyd's syndicate to reinsure another, but when [[Piper Alpha]], a [[North Sea oil]] rig, exploded on 6 July 1988 causing an initial $1.4bn loss, the practice had become so widespread that the underwriters in Lime Street initially had no idea how extensive their exposure was: the loss was passed around in what became known as the London market excess of loss (LMX) "spiral" and claim values escalated out of control.

The rig's operator, [[Occidental Petroleum]], bought a direct insurance policy from Lloyd's underwriters, who then passed part of their shares of the risk on to other syndicates via reinsurance. Those reinsurers then in turn reinsured part of the risk out to other reinsurance underwriters within Lloyd's (known as "retrocessionaires"), and so on. Consequently, many syndicates, especially those writing a large amount of excess of loss reinsurance, became exposed to the same claim multiple times through multiple layers in the spiral. Other catastrophes, including [[Hurricane Hugo]] and the [[Exxon Valdez oil spill|''Exxon Valdez'' oil spill]] in 1989, also went into the spiral.

Some of the leading LMX reinsurers at the time that suffered serious spiral losses included the numerous syndicates managed by the Gooda Walker agency, Devonshire syndicate 216, Rose Thomson Young 255, R. J. Bromley 475, and Patrick Fagan's already challenged Feltrim syndicates 540 and 542. Gooda Walker syndicate 298 became the first fatal casualty, with 13,500 policies being exposed to the Piper Alpha disaster alone and its 1989 account producing a 650 per cent loss on capacity; Feltrim followed with a 550 per cent loss on capacity.<ref name=Mantle/> Roy Bromley, underwriter of syndicate 475, later committed suicide after being dismissed by his Board and reportedly becoming distressed at his operation's mounting losses.<ref>{{Cite news|url=https://www.independent.co.uk/news/lloyds-underwriter-commits-suicide-1480134.html|title=Lloyd's underwriter commits suicide|last=Moore|first=John|date=23 January 1993|work=[[The Independent]]|access-date=28 June 2019}}</ref>

Not all excess of loss writers succumbed to the LMX spiral; in fact the spiral was relatively confined to a minority of such syndicates. Among the prominent reinsurers that remained profitable throughout the spiral were C. F. Palmer syndicate 314, M. H. Cockell 269/570 and D. P. Mann 435, while G. S. Christensen 958 reported only a slight loss in 1989 but healthy profits in 1990 and 1991.<ref name=Luessenhop/>