New to Lloyd’s

Lloyds's of London is not a company; it's a specialist insurance market where members join together as syndicates to insure risks. Lloyd’s began over 300 years ago, in Edward Lloyd’s coffee house in the City of London, where merchant ship owners would meet individual investors with the capital to insure them. Since then, Lloyd’s has built on this maritime heritage to become the world’s leading market for specialist property and casualty insurance. Individual investors have been replaced by groups of members and corporate entities called syndicates. As of December 31, 2011 Lloyd's was made up of 88 syndicates, according to the Lloyd's 2011 Annual Report.

Although the coffee house has been replaced with more modern facilities, business at Lloyd’s market is still conducted in a traditional face-to-face setting in the Underwriting Room. It is a dynamic environment, where brokers present potential risks to underwriters who will then decide how much of the risk they wish to underwrite and at what rate. In the subscription market, syndicates take varying shares of the same risk.

There are a number of channels for potential insureds to place risks at Lloyd’s, but the vast majority of business is done through Lloyd’s brokers. Capital to support the syndicates’ underwriting is provided by members of Lloyd’s. These include many of the world’s major insurance groups, listed companies, individuals, and limited partnerships, with corporate syndicates providing most of the capital for the Lloyd’s market.

A Lloyd’s syndicate is formed by one or more members joining together to accept insurance risks. Most syndicates will write a range of classes of business, but many will have areas of particular expertise.

While syndicates are technically annual ventures, they operate on an ongoing basis with members having the right, but no obligation, to participate in syndicates for the following year. This results in a great deal of continuity in the capital backing syndicates. The stability and range of these core capital providers mean syndicates function like permanent insurance operations under the Lloyd’s umbrella.

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