insurance
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by John C. Vann
A look at Lloyd's
• The insurance company image has grown a little tarnished over the past few years owing to the crop of liquidations in the motor insurance field. An operator asked recently where Uoyd's stand in all this.
Lloyd's is unique. It is not an insurance company in the strict sense, but is a place where individuals, called underwriters, accept (or reject) insurance. They transact business for their individual profit or loss and in competition with each other. It used to be each underwriter for himself. But towards the end of the last century the syndicate system grew up, by which underwriters joined together in groups so that the resources of a large number of underwriters were combined into a single unit.
Lloyd's has 33 syndicates specializing in motor insurance coming under the jurisdiction 9f the Lloyd's Motor Underwriters' Association. These syndicates compete against each other and thus Lloyd's is a highly competitive market.
The name of Lloyd's is synonymous with security. Its history goes back as far as 1688 and never has it failed to meet its full obligations to its Policyholders throughout the world.
A point to note is that there is no limited liability with members of Lloyd's. Each one is liable to the last new penny of his private estate. Extremely stringent conditions are laid down and these must be satisfied befcire a person can qualify for membership. This ensures that only those of the highest integrity and sound financial standing are elected.
Lloyd's is proud of its tradition of absolute security. To this end there exists a central fund. Into this fund goes a small part of every premium paid to Lloyd's. The fund is there to meet underwriting liabilities of any member in the unlikely event of his security and personal assets being insufficient to meet his underwriting commitments. This kitty amounts to several million pounds and is for the protection of insured persons and not of the underwriter, as he is still responsible for his liabilities in full.
The public cannot deal direct with Lloyd's underwriters. Thus if an operator wants to have a quotation from a Lloyd's syndicate he must obtain this through an insurance broker who fias access to the Lloyd's market There are, in fact, just over 200 firms of approved Lloyd's insurance brokers, mostly in London. . But the vast majority of provincial insurance brokers deal through one or more of these approved Lloyd's brokers and are in this way able to quote Lloyd's premiums.
A few selected provincial brokers, however, are allowed to deal direct, with certain of the Lloyd's underwriters by special arrangement and this is a great step forward, being more efficient and speedy than having to go via a Lloyd's broker.