Lloyds of London

Lloyds of London is an insurance market of a kind to be found nowhere else in the world. Almost anything can be insured there, ships, aircraft, civil engineering projects, factories, oil rigs and refineries to name but a few of the thousand and one risks which are placed at Lloyd’s each year.

Lloyd’s is not a company. It has no shareholders and accepts no corporate liability for risks insured there, Lloyd’s is a society of underwriters, all of whom accept insurance risks for their personal profit or loss and are liable to the full extent of their private fortunes to meet their insurance commitments. Lloyd’s Coffee House made its appearance in Tower Street in 1688.

Lloyd’s Coffee House proprietor, Edward Lloyd, encouraged a clientele of ship’s captains, merchants, shipowners and the like; he soon gained an enviable reputation for trustworthy shipping news. This was one of the basic ingredients of successful underwriting and perhaps more than any other factor ensured that Lloyd’s coffee house became the recognized place for obtaining marine insurance. Until this time there is nothing to suggest that underwriting was carried out exclusively in any one place.

In 1871 the Lloyd’s Act of Parliament created the Corporation of Lloyd’s. The principle of individual and unlimited liability remains as valid today as it was three centuries ago. The Corporation, through the Council of Lloyd’s, nevertheless lays down stringent regulations governing the financial requirements both for Lloyd’s membership and the audit of underwriting accounts.

The most recent Act of Parliament covering the activities of Lloyd’s is the Lloyd’s Act 1982 which resulted from an inquiry into the society’s constitution and the effectiveness of its powers of self-regulation.

The Corporation of Lloyd’s, as befits the true successor to Edward Lloyd also provides its members with their premises and a variety of centralised supporting services. Details of these can be seen at www.lloydsoflondon.co.uk. As it was three centuries ago a policy is subscribed at Lloyd’s today by private individuals with unlimited liability.

Today, however, over 20,000 members of Lloyd’s are grouped into some 40 syndicates varying in size from a few to more than a thousand names. The affairs of each syndicate being managed by an underwriting agent who is responsible for appointing a professional underwriter for each main class of business. Underwriting membership is open to men and women of any nationality provided that they meet the stringent financial requirements of the Council of Lloyd’s.