Lloyd's Of London

Lloyd's of London is a British insurance market where members join hands as syndicates to insure and spread risks of different businesses, organizations and individuals. The syndicates are specialized in different types of risks and each syndicate decides which type of risk to insure. Its main purpose is to act as an intermediary between clients, underwriters, brokers and insurance companies. 

Lloyd's of London functions like any financial market where buyers represent businesses or clients who want to hedge different risks. Buyers look to purchase protection (insurance policies) and sellers represent members who provide and sell protection against risks faced by these businesses or clients. The market also includes brokers, who help buyers and sellers meet an optimal match and managing agents who handle syndicates on behalf of members (the ones who provide the capital).

Unlike most of its industry peers, Lloyd's of London is not an insurance company. Rather, Lloyd's is a corporate body governed by the Lloyd's Act of 1871 and subsequent acts of Parliament. It operates as a partially mutualized marketplace consisting of multiple financial backers, grouped in syndicates, convened to pool and spread risks. These underwriters, or "members," include both corporations and private individuals, the latter of which are known as "names."

Lloyd's mostly deals with general insurance and reinsurance, although some syndicates write term life insurance. With roots in marine insurance, Lloyd's was founded by Edward Lloyd at his coffee house on Tower Street in 1686. It was a popular with sailors, merchants and ship owners, and Lloyd catered to them with reliable shipping news. The establishment became known as a good place to purchase marine insurance. The shop was also frequented by mariners involved in the slave trade. Lloyd's obtained a monopoly on maritime insurance related to the slave trade and maintained it until the early 19th century. The Lloyd's Act gave the business a sound legal footing. The Lloyd's Act of 1911 set out the organization's objectives, which include the promotion of its members' interests and the collection and dissemination of information. Today, Lloyd's has a dedicated building on Lime Street, which opened in 1986.

In 2016, there were 99 syndicates (compared to 84 in 2015), managed by 57 managing agencies, that collectively wrote £29.862 billion of gross premiums on business placed by 258 Lloyd's-approved brokers. Conventional insurance represented 69 percent of the policies written, mainly property and liability policies. The remaining 31 percent was reinsurance.