How often have you heard about the Lloyd’s of London insurance someone or something has in place? One of the oldest providers of unique Specialty Lines Insurance coverage Lloyd’s of London began in Edward Lloyd’s Thames-side coffee house in Tower Street in the City of London, England. The exact date of the original establishment isn’t known, but there’s evidence Lloyd’s coffee house was popular with the London business circles as early as 1688.
Today, Lloyd’s is the world’s leading insurance market. Not to many people make it very long in life without hearing about this insurance provider.But, Lloyd’s isn’t the same as an insurance company, rather Lloyd’s is brokered market where more than 130 underwriting syndicates compete and co-operate in order to determine which Risks they will accept and what premium rate they will charge. The syndicates competetive and cooperative method makes it possible for Lloyd’s to offer a wide range of insurance choices, expert knowledge, and experience all at one source.
Edward Lloyd wasn’t personally involved with the Business of Insurance but he did offer the coffee house as a meeting place to share, dependable shipping news and other services to help his customers who consisted of ships’ captains, merchants and rich men. The Lloyd’s coffee house became the place to conduct business which induced the insuring ships and cargo.
The rich men at the coffee house would review the risks and accept a share of a risk, by signing their names one beneath the other on each policy together. Each man wrote his name and share under the other and these men were known as the original “Underwriters” because of they way they wrote their insurance documents.
Lloyd passed away in 1713 but his coffee house remained and continued to serve as a central meeting point for the marine insurance industry. At the end of the 18th century the Lloyd’s underwriters decided to elect a committee and move to their own business location, in the Royal Exchange. Only the members of Lloyd’s were permitted to transact insurance business.
The Society of Lloyd’s was incorporated with the passage of the Lloyd’s Act in 1871 and a sound business and legal foundation was established to expand to what we know about Lloyd’s and the speciality insurance markets they offer today. Lloyd’s had stated as a club of marine insurance underwriters and has become an international market for insurance risks of almost any kind.
Lloyd’s of London became a world center for insurance and today transacts business in the multi-billions of pounds of premium collection every year. It provides insurance coverage for a large range of commercial and personal insurance needs and today is one of the largest providers of surplus lines and specialty lines insurance and reinsurance in the United States. Most people think of Lloyd’s as the “company” that will insure anything while this may not always be true the Lloyd’s of London underwriters history of willingness to think of new types of insurance risks and ways to cover these risks proves their reputation for innovation.
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