Stability and security

Financial security is crucial. It gives confidence to capital providers and peace of mind to policyholders. 

Lloyd’s strength and robust capitalisation is reflected in our ratings. Four of the world’s leading insurance rating agencies recognise Lloyd’s strengths and the financial strength of the market. 

All Lloyd’s syndicates benefit from Lloyd’s central resources, including the Lloyd’s brand, its network of global licences and the Central Fund. As all Lloyd’s policies are ultimately backed by this common security, a single market rating can be applied. The Lloyd’s financial strength ratings apply to every policy issued by every syndicate at Lloyd’s since 1993.

Lloyd’s financial strength derives from its unique capital structure, often referred to as the ‘Chain of Security’. It provides excellent financial security to policyholders and capital efficiency for members.  

The Corporation is responsible for setting both member and central capital levels to achieve a level of capitalisation that is robust yet also allows members the potential to earn superior returns. 

There are three links in the Chain of Security: 

1. Syndicate level assets 
2. Members’ funds at Lloyd’s 
3. Central assets 

The funds in the first and second links are held in trust, primarily for the benefit of policyholders whose contracts are underwritten by the relevant member. Members underwrite for their own account and are not liable for other members’ losses. The third link contains mutual assets held by the Corporation which are available, subject to Council approval, to meet any member’s insurance liabilities.