Lloyd's (redirected from Society of Lloyd's)

Lloyd's, London insurance underwriting corporation of many separate syndicates; often called Lloyd's of London. Founded in the late 17th cent. by a group of merchants, shipowners, and insurance brokers at the coffeehouse of Edward Lloyd, the association is now international in scope. It was originally concerned with the underwriting of marine insurance, and Lloyd's Register of Shipping, established by Lloyd's, remains an annual publication containing detailed information, such as age, tonnage, class, and construction, of the vessels of all nations, together with supplementary data about docks, harbors, and port facilities. With the exception of long-term life insurance, Lloyd's now issues insurance against a wide variety of risks, including those associated with film stars' legs and rock stars' voices.

During the late 1980s and early 90s Lloyd's suffered financial losses approaching $10 billion as a result of claims ranging from damage from natural disasters (hurricanes and earthquakes) to awards in environmental (pollution and asbestos) lawsuits. This led to the personal financial ruin of many of its syndicates' individual members (called Names), who had accepted total liability in exchange for a share of the profits. Lloyd's also found itself faced with class-action lawsuits against its managing agents, who were charged with having failed to adequately advise their clients of the potential risks involved. To win new financing necessary to cover future policies, Lloyd's changed its centuries-old policy and began accepting corporate money and offering limited-liability investments. Corporate investors now provide some 80% of the capital, and changes adopted in 2002 led Lloyd's to stop accepting (2003) new individual members and to increase central control over the syndicates.

Bibliography

See studies by D. E. W. Gibb (1957, repr. 1972), R. S. Sayers (1957), A. Brown (1974, repr. 1987), A. Raphael (1995), E. Luessenhop (1995).

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Lloyd's

 byname Society of Lloyd's

Insurance marketing association in London, specializing in high-risk insurance services. Its history dates to 1688, when Edward Lloyd kept a London coffeehouse where merchants, seafarers, and marine-insurance underwriters met to transact business. The underwriters at Lloyd's eventually formed a marine-insurance association (incorporated 1871); it expanded to include other forms of insurance in 1911. Unlike most contemporary insurance providers, Lloyd's operates as a marketplace for insurance and consists of hundreds of individual members and corporations organized in syndicates, which are represented at Lloyd's by underwriting agents. Individual syndicate members, rather than the corporation, are liable for losses. Until record losses in the 1980s and '90s bankrupted some syndicate members, they had unlimited liability for business transacted for them; in 1993 that liability was limited.{hazard symbol} See also insurance, liability insurance.