Lloyd’s is not an insurance company. It is made up of separately managed, independent businesses run under a franchise. Each business has three parts to it.
Underwriting members – companies, limited partnerships and individuals approved to underwrite insurance at Lloyd’s. Corporate members are companies or limited partnerships specially formed to underwrite at Lloyd’s.
The syndicate – one or more members managed as a unit by a managing agent to underwrite insurance. Although it is often thought of as the underwriting unit, it has no separate legal status.
The managing agent – a company authorised by the Financial Services Authority and set up only to manage one or more syndicates.
There are three main ways to participate in the Lloyd’s market:
1)You can set up your own corporate member to participate on one or more of the syndicates which already exist.
2) You can set up your own syndicate and corporate member and underwrite business in line with your own business plan. You would need to find a managing agent that would be willing to manage the syndicate on your behalf. (This is often referred to as a turnkey arrangement).
3) You can set up your own syndicate and corporate member and your own managing agent to run your syndicate (an ‘integrated Lloyd’s vehicle’). This structure is analogous to setting up an insurance company.
