The Monster in Loch Ness

Abstract

A few years ago a firm in Scotland offered a large award for the capture of the monster in Loch Ness. The firm soon regretted its rash promise and covered the risk by insurance. Some aspects of this unusual insurance contract are discussed. In 1971 the whisky producer Cutty Sark offered an award of one million pounds for the capture of the monster assumed to exist in Loch Ness. The author does not know what led the firm to make this offer, nor does he know how the offer affected the firm's share of the whisky market. His only source of information is a recent book by Anthony Brown.' Apparently somebody in the higher echelons of Cutty Sark got cold feet after the offer had been made, and approached Lloyd's in London. usual Lloyd's was obliging, and agreed to cover the risk for a premium of ? 2,500. The case was appropriately handled by marine underwriters. The insurance contract or is reproduced in Brown's book, and it is of interest that Lloyd's observed all the proper forms. The contract specifies that the risk is covered only if the monster is captured alive between 1st May 1971 and 30th April 1972. Further the slip says: As far as this insurance is concerned, the Loch Ness Monster shall be deemed to be: 1) In excess of 20 feet in length 2) Acceptable as the Loch Ness Monster to the curators of the Natural History Museum, London. ARIA member Karl Borch is at the Institute of Insurance in Bergen, Norway. This previously unpublished paper was presented at the CEDEP Conference on Foundations and Applications of Bayesian Methods, Fontainebleau 1-4 June 1976. 1 BROWN, ANTHONY: Hazard Unlimited. The Story of Lloyd's of London, Peter Davies, London 1973.