LLOYD’S, the insurance market that ruined many investors in the 1980s and 1990s, has cleaned up its act and wants to attract the public again.

Investors in Lloyd’s, who are known as names, have doubled their money over the past three years after the market overhauled its structure and introduced new safeguards.

Lloyd’s operates as a society of companies and individual names who provide capital to underwrite insurance. Until January 2003, names had unlimited liability: losses could exceed the capital they had put up.

Many names were driven to bankruptcy in the 1980s and 1990s after a string of big losses, including the Piper Alpha oil rig disaster, the San Francisco earthquake and asbestos claims from the US.

Then in September 2001, the terrorist attacks on the World Trade Center became the biggest loss in the market’s 317-year history and plunged it £3.1 billion into the red.

It appears to have turned the corner, however. In 2002 it made a £834m profit, followed by £1.89 billion in 2003 and £1.36 billion last year, even though 2004 was the worst-ever year for natural catastrophes, including hurricanes in the US.

Ed Burke, manager of the Invesco Perpetual UK Aggressive fund and a big investor in Lloyd’s companies, said: “Lloyd’s is in better shape than it has been for a long time — perhaps any time in its history. Its underwriting activities have been injected with a new discipline through tighter regulation and it has offloaded long-term liabilities, such as asbestos- related claims.”

This has translated into big profits for names. The typical name underwrites £1m of insurance, on which he or she is estimated to have made a profit of £416,000 in the past three years. But names usually put up capital of only 40% of their underwriting capacity, or £400,000 for £1m, so the typical name has in fact doubled his or her money since 2002.

Lloyd’s is now on the look-out for new names, whose numbers have dwindled from 34,000 in 1990 to 2,800 today.

Last week CBS Private Capital, an agent for members, launched a fund that will give the public access to the market for a minimum investment of £50,000, compared with £350,000 if you want to become a name. This month the government has also approved a new investment vehicle for individual names, called a limited- liability partnership, which has some big advantages over current vehicles. LLPs are expected to be available from next year.

At present, names can invest in the Lloyd’s market through two vehicles — a Scottish limited partnership or a type of company called a Nameco. With both, your capital is generally free from inheritance tax (IHT). The main advantage of an SLP over a Nameco is that you can offset your losses against other income for tax purposes. The key disadvantage of an SLP is that you must cede control of the underwriting selection.

With an LLP, members will be able to offset losses and maintain control of the underwriting decisions. Capital will generally be free from IHT, and profits from LLPs will be treated as earned income. This will allow names to use their profits to make pension contributions from April next year.

Nigel Hanbury of Hampden Agencies, a members’ agent, said: “Many names are wealthy but do not necessarily have an income, so the ability to contribute their profits from an LLP to a pension will be attractive.”