Lloyds of London
Starting with its roots in marine insurance, Lloyd’s has
grown over 300 years to become the world’s leading market for specialist insurance.
In an increasingly risk-conscious world, hundreds of good ideas would never get off the ground
without a way to reduce risk. Risk can’t be eliminated but it can be managed and reduced. At its simplest
that is what insurance helps you do.
But what happens to risks that are hard to price, large or otherwise difficult to quantify and
understand? Lloyd’s specialises in exactly these risks. You would be hard pressed to find more
expertise and know-how on this subject. Understanding and pricing complex risk is the heart of the Lloyd’s
Over 300 years ago Lloyd’s started out in Edward Lloyd’s Coffee House as a place where people
with exposure to risks could meet people with capital who, for a price, would agree to insure them. That’s
exactly what Lloyd’s is today: a face-to-face market, with all the dynamism and imagination that a market
Today the Lloyd’s market covers some of the world’s largest, most individual and complicated
risks. From oil rigs and bridges to celebrity body parts; from airlines and sporting events to global banks,
millions of people at home and at work are covered at Lloyd’s.
The Lloyd's market
Lloyd's is the world's leading specialist insurance market, home to over 50
managing agents and over 80 syndicates*, which offer an unrivalled concentration of specialist
underwriting expertise and talent.
Lloyd's is the world's best known - but probably least understood - insurance
brand. This is because Lloyd's is not an insurance company but a society of members, both corporate and
individual, who underwrite in syndicates on whose behalf professional underwriters accept risk. Supporting
capital is provided by investment institutions, specialist investors, international insurance companies and
Lloyd's brokers bring business to the market. The risks placed with
underwriters originate from clients and other brokers and intermediaries all over the world. Together, the
syndicates underwriting at Lloyd's form one of the world's largest commercial insurers and a leading
The market structure encourages innovation, speed and better value, making it attractive to policyholders and
participants alike. Immediate access to decision-makers means that answers on whether a risk can be placed are made
quickly, enabling the broker to provide fast, good value solutions.
This diagram is a basic representation of the structure of the market and its participants.
A detailed description of the participants can be found below.
Members of Lloyd's, or 'capital providers' as they are often known, accept
insurance business through syndicates on a separate basis for their own profit and loss (in other words,
members of Lloyd's are not jointly responsible for each other's losses). The membership of Lloyd's comprises
a mix of corporate (limited liability) members and individuals. Private members tend to support a
number of syndicates, whereas some corporate members only underwrite through a single syndicate.
Lloyd's members conduct their insurance business in syndicates, each of which
is run by a managing agent.
The syndicates operating within the
market cover many speciality areas including:
- Professional indemnity
Syndicates tailor solutions to respond to the specific risks of the client
Syndicates compete for business, thus offering choice, flexibility and
continuing innovation. Syndicates cover either all or a portion of the risk and are staffed by underwriters,
the insurance professionals on whose expertise and judgement the market depends.
It is the responsibility of the managing agent to employ the underwriting
staff and manage the syndicate on the members' behalf. The managing agent must be a company specifically
established for the purpose of managing a syndicate, and it may not carry out any other function. A managing
agent may manage more than one syndicate.
Accredited Lloyd's brokers place risks in the Lloyd's market on behalf of
clients. These brokers use their specialist knowledge to negotiate competitive terms and conditions for
Currently there are over 180** firms of brokers working at Lloyd's, many of
whom specialise in particular risk categories. Each Lloyd's broker is required to demonstrate an
understanding of the Lloyd's market, as part of Lloyd's assessment of its suitability to be accredited as a
Lloyd's operates an accreditation process for brokers seeking access to the
Lloyd's Market. All brokers must satisfy all relevant regulatory requirements. Lloyd's performs a careful
assessment of all applicant brokers, affirming their reputation and financial standing and investigating the
character and suitability of officers and employees before making the decision to accredit.
*including SPS and RITC syndicates. Source: Relationship Management, November 2009
** source: Relationship Management, November 2009
Regulation of Lloyd's
Lloyd's is regulated by the UK Financial Services Authority (FSA), under the
Financial Services and Markets Act 2000.
The FSA also regulates Lloyd's managing agents, members' agents and Lloyd's
The FSA and Lloyd's have common objectives in ensuring that Lloyd's market is appropriately regulated and, to
minimise duplication, the FSA has agreed arrangements with Lloyd's for the co-operation on supervision and
Everything you need to know about Lloyds on 2 pages
If all you need is a quick guide
to Lloyd's, this two page factsheet gives an overview of what Lloyd's is, how it operates and who the
market participants are. It also provides key facts and figures about the world's leading insurance
NB: The above information has been taken from the subject
insurer's website and annual reports and is current as of March 2010. We accept no responsibility for inaccurate
information. This information should be used as an indication only.