I Am Thinking About....LLOYD'S OF LONDON

If you look to the right under the books I am NOW READING you will see that THE ASCENT OF MONEY is still not done.  Also not completed is AN INSTANCE OF THE FINGERPOST.

A short time ago a connection occurred for me while reading the two books.  In ASCENT,  I had reached the chapter on insurance and the author was speaking about LLOYD’S OF LONDON…at the same time,  in the FINGERPOST novel,  I realized that periodically the characters were meeting at LLOYD’S coffee house. SNAP!!!!


When something is insured by LLOYD'S OF LONDON we all know it is special and unique. Now I know how it all got started and how it works. Here is a brief history of LLOYD’S.

Lloyd’s of London is neither a company nor a corporation. It is a British insurance market.


It serves as a meeting place where multiple financial backers or “members”, which can be individuals, who are known as “Names” or corporations, come together to pool and spread risk. Their main business is in the reinsurance market.


The market began in Edward Lloyd’s coffeehouse around 1688 on Tower Street, London.


Mr. Lloyd served as a sort of one-man tourist center and evidence suggests that, for a price, he was not above fixing a press gang who shanghaied men into the naval service.

His coffeehouse was a popular place for sailors, merchants, and ship owners. Lloyd’s main business with his customers was to provide reliable shipping news, which he gathered from all his different customers and then fed back to them. The shipping industry community frequented the place to discuss insurance deals among themselves.

Nothing else is known about Edward Lloyd.


Soon after Christmas in 1691, the establishment moved to Lombard Street, where today a blue plaque commemorates its location.

Long after Lloyd’s death in 1713 the arrangement continued until 1774 when the participating members of the insurance arrangement formed a committee and moved to the Royal Exchange, and called itself The Society of Lloyd’s.


Here,  Lloyd's List, a paper devoted to shipping news, was published in 1734, making it the oldest London newspaper excepting the London Gazette.

 By 1760 the precursor of Lloyd's Register of Shipping had been printed and only 15 years later the phrase A-1 was used in its pages to denote the highest class of ship, novelist Charles Dickens 1st applying A-1 to people and things in 1837. A-2 and A-3 indicated inferior grades.

Between 1688 and 1807 a primary source of Lloyd's business was the insurance of ships engaged in slave trading, since Britain was rapidly becoming the chief slave trading power in the Atlantic.

British shipping carried more than 3.25 million people into slavery. By the end of the eighteenth century, slaves had come to dominate British trade.

The dangers involved necessarily meant that insurance of slave shipping was a major concern. Between 1689 and 1807, 1,053 British vessels were lost during these activities.


The insuring of ships engaged in slave trading became LLOYD’S major area of focus.  Because this formed such a prominent part of Lloyd’s business, the organization was one of the chief opponents to the abolition of slavery.


In 1838 the Exchange burned down and, although rebuilt, many of Lloyd’s early records were lost.

In 1871, The first Lloyd’s Act was passed in Parliament which elevated the business to a legal footing. The Lloyd’s Act of 1911 set out the Society’s objectives, which included the promotion of its members’ interests and the collection and dissemination of information.


The membership of the Society, which had been largely made up of market participants, was realized to be too small in relation to the market's capitalization and the risks that it was underwriting.


Lloyd's response was to commission a secret internal inquiry, known as the 'Cromer Report', which reported in 1968.

This report advocated the widening of membership to non-market participants, including non-British subjects and women.

They also needed to reduce the onerous capitalization requirements (which created a more minor investor known as a mini-Name).

The Report also drew attention to the danger of conflicts of interest.


Lloyd's of London, which began by writing only marine insurance at its inception, is now world-famous for what it insures.


Lloyd's, now international, eventually moved to the Royal Exchange and finally to its present $15-million palace on Lime Street.

It adopted its name legally when incorporated a century ago, not long before writing the 1st burglary insurance (1889). Lloyd's also wrote the 1st policy covering loss of profits resulting from fire and pioneered in automobile and workman's compensation insurance.


The corporation can issue anything but long-term life insurance.


Rather than an insurance company, it is a corporate group of some 300 syndicates composed of about 5,500 strictly supervised individual underwriters, each of whom must deposit large sums--about $35,000--as security against default on the risks each accepts.

Although the group did not write the 1st marine policy--this dating back to a Florentine policy issued in 1501--its name is synonymous with marine insurance and Lloyd's has long pioneered in setting maritime standards and safety measures. Lloyd's prime concern is still shipping insurance and it boasts that its agents watch every mile of seacoast throughout the world.

An underwriter of the 1880s named Cuthbert Bean was mainly responsible for the group pioneering beyond marine insurance. Some interesting Lloyd's policies and losses in its risky history include:


...a "happiness policy" that insured against "worry lines" developing on a model's face.

...losses paid of $3,019,400 after the Titanic disaster; more than $5.6 million on the Andrea Doria; $1,463,400 on the San Francisco earthquake; $110 million on Hurricane Carol in 1954.

...$22,400 worth of protection ($74 premium) against "death caused by accident" in the form of a falling sputnik.

 ...policies insuring against the chances of having twins, one's golf opponent making a hole in one, war and peace, rained-out church socials, and losing one's lover.

...Betty Grable's legs insured for $250,000.

Jimmy Durante's nose, $140,000.





Flamenco dancer Jose Greco's special trousers insured against splitting at $980 a pair.

Fred Astaire's legs for $650,000. 

Abbott and Costello insured for $250,000 against disagreement over a 5-year period;

...Risks turned down include a policy insuring the back teeth of an acrobat, who hung from them in her act.

And.... the request by a European gentleman to insure his daughter's virginity.

Provide a bunch of guys with a bar and a little over 300 years…..sometimes they surprise you!