LLOYD’S SECRET SERVICE

Hokitika Guardian, 17 May 1926, Page 1

LLOYD’S SECRET SERVICE

(By an Insurance Correspondent in a London paper.) How many people know, I wonder, that Lloyd’s have an intelligence service which daily collects information about shipping from all parts of the world?

AVorking in secret, this service makes investigations all over the world and issues confidential reports, giving “inside” information concerning cases of overloading, vessels sailing in bad condition, and the tricks of the shady foreign snip owner. This secret information is of the greatest service to underwriters, and lias, on occasion, led to the detection of fraud. Tfc is a very difficult undertaking these days to bring off a fraudulent insurance claim.

During the past six years underwriters have successfully defended a very large number of claims made by foreign ship owners. Because of the shipping slump, numbers of unscrupulous foreigners have sought to 10cover their trading losses by deliberatev casting away their over-insured vessels.

In some eases the game has been given away by one who has got wind

of tho proposed fraud communicating with Lloyd’s, but this is not the only way in which fraud is detected. In one case ,a vessel supposed to have been sunk by a .floating mine was proved to have been deliberately sunk by an explosion from within tho vessel, good staff work having made it clear that no mine could possibly have been in the waters where the accident occurred.

In another case, heavy insurance was obtained on army stores loading at a foreign port. Casual mention of tin's fact by an underwriter to a broker led to investigation by Lloyd’s agent at the loading port. It was found that the “stores” consisted of worn-out army hoots, worth next to nothing, and the insurance was promptly cancelled. Underwriters recently found they were receiving many heavy claims for sea-water damage to goods. The Liverpool Salvage Association, an institution created by underwriters for their protection and benefit, undertook investigation. It was proved that in many cases sea-water was deliberately introduced into cases containing perishable goods, and analysis showed that in some instance a solution of salt and water had been used to produce effects like, sea-water damage. A number of claims were rejected as a result of this investigation, while doubtful cases were compromised at an enormous saving to t]ie underwriters. 1 Perhaps the most striking case of detected fraud is that of the Alabrouk, a Turkish vessel which sailed from Beirut with a cargo of alleged to be gold but declared to the Customs as “old iron,” the underwriters being told this was a ruse to avoid the Turkish prohibition of tlio export of gold. The vessel was lost, and £400,00 being involved, investigation was made. Unfortunately for the insured, the vessel had sunk in shallow water, and divers were able to prove that the cargo was indeed old iron.