Senior IAG executives have received a hostile reception at its London annual general meeting.

Reports say UK CEO Ian Foy and active underwriter of its Lloyd’s motor syndicate, Equity Red Star, Mark Bacon, were confronted by Lloyd’s Names and other capital-providers about the syndicate’s recent losses.

The Names also questioned the company’s decision not to extend to them an adverse loss development (ALD) cover it purchased from Berkshire Hathaway for its share of the syndicate.

According to UK publication Insurance Insider, IAG officers told the meeting that cover for 2001 to 2009 – which IAG purchased in June 2010 – would have cost £235 million ($358 million), but at the time the syndicate only had £200 million in trust ($304 million), and purchasing additional ALD cover would have resulted in a capital call on the Names. 

A similar decision was reportedly taken relating to ALD cover for 2010, which IAG purchased earlier this year. 

Mr Foy and Mr Bacon explained their strategy for returning the syndicate to profitability.

In his recent briefing to Australian investors, Mr Foy said the UK motor market had now reached the bottom of the cycle and remedial actions were being taken to return the UK business to profitability.

He said the strategy involves a reduction in overall gross written premium and in external broker-sourced standard private car and household business, and an increase in higher-quality private car business through its affinity partners and an improved underwriting structure aligned to support desired product mix going forward.