Lloyd’s of London

3rd Session

A Brief History of Lloyd’s

Lloyd’s began in Edward Lloyd’s Thames-side coffee house in Tower Street in the City of London.

Although the exact date of its establishment is unknown, evidence exists that Lloyd’s coffee house was well known in London business circles by 1688.

A Brief History of Lloyd’s

Lloyd himself was not involved in Insurance but provided premises, reliable shipping news and a variety of services to enable his clientele of ships’ captains, merchants and rich men to carry on their business of insuring ships and their cargoes.

A Brief History of Lloyd’s

The wealthy individuals in the coffee house would each take a share of a risk, signing their names one beneath the other on the policy together, with the amount they agreed to cover. For this reason they were known as underwriters.

A Brief History of Lloyd’s

Lloyd died in 1713 but the coffee house continued to prosper as a centre for Marine Insurance.

By the end of the 18th century the underwriters had elected a committee and moved to their own premises in the Royal Exchange. Only members of Lloyd’s were allowed to accept Insurance business.

A Brief History of Lloyd’s

The society of Lloyd’s was incorporated by the Lloyd’s Act 1871 which provided the business with a sound legal basis and laid the foundations for today’s market.

A Brief Histroy of Lloyd’s

By the turn of the last century the traditional club of marine underwriters had become an International Market for Insurance risks of almost every type. Lloyd’s pre-eminence as a world centre for Insurance had been established.

Lloyd’s of London

Lloyd’s of London is a major worldwide ocean marine insurer that writes a wide variety of risks and is extremely important as a professional reinsurer. Lloyd’s is also famous for writing insurance on diverse exposure units such as a pianist’s fingers, a Kentucky Derby winner’s legs (that’s the horse!), and a hole-in-one at a professional golf tournament.

Important Characteristics

1. Lloyd’s technically is not an Insurance company, but is an association that provides physical facilities and services to the members for selling Insurance.

Important Characteristics

2. The Insurance is actually written by the various syndicates that belong

to Lloyd’s.

Important Characteristics

3. The individual members (names) who belong to the various syndicates

have unlimited liability with respect to Insurance written as individuals.

Important Characteristics

4. Corporations with limited liability can now join Lloyd’s of London.

Important Characteristics

5. Individual members must also meet stringent financial requirements.