Lloyd's of London

Lloyd 's of London, based in London is an international insurance market. Unlike the competitors in the insurance and reinsurance business is Lloyd's of London no company or corporation, but a stock market that is traded on the insurance.

Lloyd 's of London stands apart from the common beginnings in Lloyd's coffee house in no connection to Lloyd 's Register of Shipping, a shipping register and a classification society.

History

The beginning of Lloyd's was a cafe, which from a certain Edward Lloyd ( first mentioned in an advertisement in the London Gazette The London Gazette of 18 February 1688), first in the London Tower Street, then in Lombard Street was out. Like other coffee houses was Lloyd's a meeting place for business people, including those who were willing to cover risks in the maritime field. It became the custom to find a Insurer in the coffee because there was more than one provider to find. This was all the more attractive as 1720 by the rights assignment a de facto monopoly in the field of insurance companies came into being and so private insurer were an important alternative. In the 18th century, Lloyd's coffee house became a center for such private insurance. Lloyd died in 1713, the coffee was under the name of Lloyd's on. From 1774 to 1928 resided Lloyd's - no longer as a coffee house - in the Royal Exchange. Since then, the seat of the institution was in their own houses. The latest, from 1978 to 1986 built building is a creation of architect Richard Rogers., Designed by Robert Adam Committee Room on the 11th floor, however, dates from the year 1763rd He was transferred stone by stone in the futuristic skyscraper Rogers. To 1811, the slow conversion process from Lloyd's began in a society, as were established agencies, for example, and sets up its tasks. 1871 ( Lloyd 's Act ), the business operations of Lloyd 's of London was regulated by law, the focus is on the individual commitment of the insurer.

Lloyd's insurance market

The focus is on one side of the policyholder, originally exclusively shipowners, who for a risk - pay premiums - for example, the case of a shipwreck. On the other side are the Names, virtually the insurer. If a contractually defined case of damage, ie decreases example, a Lloyd's insured vessel, the policyholder from the personal assets of the Names to the contract amount will be compensated.

Names

As names are called investors in the insurance business. They pledge their personal assets ( ie liable personally, hence the name ) of a certain level for certain risks, such as single ships. The advantage of this investment is that the Names their risk capital - as long as the damage would not occur - can continue to use: Real estate in addition to the insurance premiums continue to provide rental income, cash assets can continue to be created. These so-called names are also referred to as " Kopf ".

Code

A Code is intended to protect the claims of both sides: The Names must also be protected in the event of a claim against impoverishment, the claims of policyholders can not be jeopardized by parallel operations of Names. Originally this was done by a social elite: Names had to have cash assets of sufficient value.

Due to the increased demand for insurance in the twentieth century, the rules were complicated; theoretically could soon be anyone to name, to protect both sides created a Code of Rules: This custom home is accepted by Lloyd's as a guarantee only if the name is also protected in the event of a claim against homelessness. On the other hand the name of collateral, such as cash assets must not compromise by high-risk speculation.

Syndicates

Within Lloyd's business to numerous syndicates was divided, which act as competing insurance companies side by side. In order to form centers of excellence, the syndicates have specialized in areas such as aviation, ships, buildings insurance, reinsurance, etc..

Linkages

For the purposes of diversification Names have pledged their assets at different syndicates for different projects. At the same time require high amount at risk (as in billion-dollar oil rigs ), which could not be covered by the Names of individual syndicates, complex chains of reinsurance contracts between syndicates, so that the names could not understand for what risks they stuck.

Burst bubble

When the oil rig Piper Alpha had to be accounted for as a total loss after a fire in 1988, also the need for reform at Lloyd's showed: The existing chain of rear - insurance meant that the whole of the syndicates had to write a multiple of actual damages as a result of the accident.

Reaction

This provided a further impetus for a discussion on the internal procedures of Lloyd's: These were mainly influenced by traditions such as the handwritten entry of insurance contracts in the books; in the computer age an obstacle to the demand for transparency.