Lloyd's of London is the world's leading insurance market, a meeting place for market makers to distribute risk.

Lloyd's of London was founded in the 17th century in Lloyd's Coffee House in Lombard Street in the City of  London. Today Lloyd's of London is housed in a modern building in Lime Street in the City of London.

The growth of trade in the 17th Century led to an increasing demand for ship and cargo insurance, and Lloyd's coffee house became recognised as the place for meeting someone who might offer it. In the last 300 years Lloyd’s has grown to become the world’s leading market for specialist insurance.

In the 18th century keen marketeers eventually  moved from the Coffee House to the Royal Exchange, forming the The Society of Lloyd's. In the late 19th and early 20th centuries various Lloyd's Acts were passed by Parliament and gave Lloyd's of London a sound legal footing.

In the 1960s there was a widening of membership to non-market participants, creating minor investors known as a 'mini-Names'.

In the early 1990s Lloyd's went through a traumatic period as unexpectedly large legal awards in US courts for punitive damages led to large claims on APH (asbestos, pollution, health hazard) policies dating back to the 1940s. Current members were liable for losses, which were usually paid through reinsurance, but the losses were too large to be dealt with in this way.

Since then Lloyd's has instituted major structural changes. Corporate members with limited liability were permitted to join and underwrite insurance. No new “unlimited” Names can join. Financial requirements were changed to prevent excess underwriting not backed by liquid assets. Market oversight increased. Lloyds has started to thrive again since the turn of the millennium, but new companies in Bermuda have captured a large share of the reinsurance market.

References & further reading

[1] Lloyd's of London home page, lloyds.com

[2] Lloyd's of London - Wikipedia, the free encyclopedia