Lloyd’s of London

(insurance) A market of 66 insurers (themselves syndicates) that operate under the Lloyd’s of London umbrella. Each insurer specializes in a specific risk such as ocean vessels (Exxon Valdez shipwreck and oil spill in Alaska), liability (asbestos), manufacturing facilities (match and fireworks factories), buildings (World Trade Center in New York), excessive risks (1906 San Francisco Earthquake), reinsurance (the insurance of insurance companies) and retrocessions (the reinsurance of reinsurance companies). Lloyd’s does not sell insurance to individuals.
Membership in a syndicate was restricted to individuals (the famous “Names”) with significant net worth. Names accept unlimited personal liability (“down to their cufflinks”) on the policies they write.
In the 1990s Lloyd’s allowed “Names” to convert to “Namecos,” limited liability companies, which enabled them to carry forward income tax losses or defer capital gains. Previously, Names had not been permitted by the Inland Revenue to do this because their business could not be transferred as a going concern. These tax concessions now also apply to (the otherwise obscure) Scottish limited partnership.
Lloyd’s of London was founded in 1688 at Edward Lloyd’s coffeehouse near the Royal Exchange at the London docks on the Thames River. Lloyd’s became the premier meeting place for merchants, ship owners, ship captains, and other parties to exchange gossip, trade news and shipping information. It also became the premier meeting place for those willing to underwrite maritime ventures and insure cargoes and ships. In time, Lloyd’s of London become the world’s largest market (not insurance company) for insurance, especially marine insurance. Lloyd’s of London; One Lime Street; London EC3M 7HA; UK; Tel: [44] (0) 20 7327 1000; Web: www.lloyds.com.

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