We all know something about Lloyds of London, be it the humble origins at a coffee house in the 1680’s, or the famous building at One Lime Street. The visit that CLIG arranged on 2 July was a fascinating opportunity to learn a plethora of information on the history of Lloyds, plus have a tour of the building itself.

But first to correct some commonly held mistakes. Lloyds of London is not an insurance company, it is not connected to Lloyds bank, or any other business of the same name in any way whatsoever. Lloyds of London is a marketplace, the physical location in which insurance companies do business with insurance brokers to the tune of £20-25bn per annum. Nothing is insured by Lloyds, it is insured at Lloyds.

Secondly, the saying that anything can be insured at Lloyds isn’t true! No-one at Lloyds will insure your life, although you can have specific parts of you body insured if you wish, from legs to taste buds (and people have)!

So how did it all begin? Edward Lloyd opened his coffee shop in around 1687 in Tower Street next to the port of London, and it wasn’t long before his clientele in the shipping trade began to do business with each other. Edward Lloyd himself never got involved in the insurance industry, the most he ever did was provide the meeting point, paper and ink, and of course, coffee. This is basically the same function of Lloyds of London today. A huge proportion, 80%, of all business at Lloyds is still done on a face-to-face basis.

Following the death of Edward Lloyd in 1713, business continued as usual until a group of the more reputable customers set up a rival establishment in 1769 and called it the New Lloyds Coffee House. As more space was needed Lloyds moved numerous times before Richard Rogers was commissioned to design a purpose built home for Lloyds of London. The now famous One Lime Street was completed in 1986 with an open plan interior space allowing total flexibility. Thus allowing the trading floor to expand and contract as needed, with spare space being converted into offices and other uses as necessary.

The structure of Lloyds is fairly simple. Lloyds is made up of Members, who are the investors. Members are either individual members, otherwise famously known as the ‘names’, or corporate members. There used to be 24,000 ‘names’, wealthy individuals who would put up a large deposit to do business in the market with unlimited liability, but there are now only 2000 left. Corporate members are companies who trade with limited liability.

The members finance the underwriting syndicates, these and other insurance companies are the providers of the actual insurance. Then there are the middle men, the brokers. These are the only people who can approach the underwriters on the trading floor. They represent clients wanting to insure almost anything from entire shipping fleets to the weird and wonderful, including a water-skiing elephant and a single grain of rice.

Times have changed since the days of the coffee shop, and nowadays only 13% of business is classified as marine with a quarter of all the world’s ships currently insured at Lloyds. Aviation accounts for 10%, motor insurance 15% and the remainder is classified as ‘non-marine’. In the last few years since 9/11, Lloyds has become the market of last resort for some areas of cover, and is the only place in the world where terrorism cover can be obtained.

The tour included a walk around the trading floors, a visit to the Nelson Museum, a reconstructed Robert Adam room, and the Lutine Bell in its rostrum, which no longer rings every time a ship is lost. To have the opportunity to experience the modern day working Lloyds, in its ground breaking building, was certainly well worth a visit (but no coffee in sight!).