Skip to main content

How the market works

Business at Lloyd’s is still conducted face-to-face, and the bustling underwriting room is central to the smooth running of the market

The majority of business written at Lloyd’s is placed through brokers who facilitate the risk-transfer process between clients (policyholders) and underwriters.

Clients can discuss their risk needs with a broker, a coverholder or a service company. Specialist underwriters for each syndicate price, underwrite and handle any subsequent claims in relation to the risk.

The market structure encourages innovation, speed and better value, making it attractive to policyholders and participants alike. Immediate access to decision-makers means that answers on whether a risk can be placed are made quickly, enabling the broker to provide fast, good-value solutions.

The Lloyd’s market houses syndicates which offer an unrivalled concentration of specialist underwriting expertise and talent.

The underwriting room in the Lloyd’s Building
The underwriting room in the Lloyd’s Building

How the Lloyd's market works

Policyholders - transferring risk

Policyholders include businesses, organisations, other insurers and individuals from around the world who seek to mitigate the impact of potential risks. Policyholders may access the Lloyd’s market via a broker, coverholder or service company.

Brokers - distributing the business

Lloyd’s is a broker market in which strong relationships, backed by deep expertise, play a crucial part. Brokers facilitate the risk transfer process between policyholders and underwriters. Much of this business involves face to face negotiations between brokers and underwriters.

At 31 December 2022, there were 384 registered brokers at Lloyd’s.

Coverholders and service companies - offering local access to Lloyd's

A managing agent may also authorise third parties to accept insurance risks directly on behalf of its syndicates. These businesses, known as coverholders, form a vital distribution channel, offering a local route to Lloyd’s in many territories around the world.

At 31 December 2022, there were 3,464 approved coverholders.

A service company is wholly owned by a managing agent or related group company and is authorised to enter into contracts of insurance for the associated syndicate. It is also able to sub-delegate underwriting authority to coverholders.

At 31 December 2022, there were 402 service companies.

Managing agents - managing the syndicates

A managing agent is a company set up to manage one or more syndicates on behalf of the members. Managing agents have responsibility for employing underwriters, overseeing their underwriting and managing the infrastructure and day-to-day operations.

At 31 December 2022, there were 52 managing agents at Lloyd’s.

Syndicates - writing the insurance

A Lloyd’s syndicate is formed by one or more members joining together to provide capital and accept insurance risks. Most syndicates write a range of classes of business but many will have areas of specific expertise. Syndicates are, technically, set up on an annual basis. In practice, they usually operate from year to year with members having the right, but not the obligation, to participate in syndicates the following year. This continuity of capital backing the syndicates means they function like permanent insurance operations. Each syndicate sets its own appetite for risk, develops a business plan, arranges its reinsurance protection and manages its exposures and claims.

At 31 December 2022, there were 77 syndicates, 8 special purpose arrangements and 7 syndicates in a box at Lloyd’s.

Members - providing the capital

The capital to underwrite policies is provided by members of Lloyd’s . This capital is backed by many of the world’s major insurance groups, listed companies, individuals and limited partnerships, with corporate groups providing the majority of the capital for the Lloyd’s market.

Members' agents - supporting the members

Members’ agents provide advice and administrative services to members, including assisting with syndicate selection.

Corporation of Lloyd's - supporting the market

The Corporation oversees the Lloyd’s market. It provides the market’s infrastructure, including services to support its efficient running, and protects and maintains its reputation.

In 2022, the Corporation had an average of 1,320 employees.

Who’s who

If you're new to the Lloyd's market, we know it can be confusing. To help, we have created a guide of who is who at every step of your journey with Lloyd's.