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The Lloyd's Corporation

An independent guardian

Edward Lloyd, the man whose coffee shop would eventually become the world’s oldest and largest insurance market, was never an insurer; he was a facilitator, providing the platform upon which underwriters and brokers built the modern insurance industry. 

More than three centuries later, the Lloyd’s Corporation continues to act as the market’s independent guardian, responsible for protecting, promoting and providing valued support services to every market participant. 

Working closely with the market under one globally trusted name, the Corporation provides the premises in which the market operates, and oversees and supports the trading that goes on within it. It regulates and reports on the performance of market participants, holds licences to write insurance in more than 70 countries, promotes the market’s growth in new territories and protects the Central Fund that guarantees financial resilience, even in times of crisis. 

Working with leading business, academic and insurance experts, the Lloyd’s Corporation also provides services to the market and contributes original research, reports and analysis to strengthen the market’s collective understanding of new and emerging risks.

The Corporation’s role includes:

Ensuring that policyholders and members are protected through Lloyd’s oversight of the market. This includes agreeing syndicate business plans and capital requirements and evaluating performance against business plans. Lloyd’s reviews each syndicate’s business plan and, if the managing agent is able to demonstrate that the plan is appropriate and justifiable having regard to its performance and capabilities, then Lloyd’s will agree the plan. The managing agent must then underwrite in accordance with that plan, compliance with which is monitored by Lloyd’s. This is set out in the Underwriting Byelaw.

Lloyd’s has set out Principles for doing business at Lloyd’s (“The Principles”). The 13 Principles articulate the fundamental responsibilities and outcomes expected of all managing agents in order to support the market’s overall performance, capital strength, financial and reputational credibility. Lloyd’s byelaws also set out a number of rules with which market participants are required to comply.

The Corporation of Lloyd’s is under statutory and regulatory obligations to act prudently in its oversight of the market, in particular to maintain market stability, protect its credit rating and prevent underwriting behaviour which threatens the Central Fund. Without such arrangements, imprudent or negligent underwriting could imperil Lloyd’s ongoing financial viability, ratings and reputation, which would not be in the interests of policyholders.

Providing services that the participants in the Lloyd’s market require to trade at Lloyd’s. This includes the infrastructure for processing risks that have been placed with Lloyd’s underwriters, operating and maintaining the Lloyd’s building and maintaining Lloyd’s international network of trading licences and offices.

Promoting the market’s attractiveness to capital providers, distributors and clients, whilst preserving its diversity.

Lloyd’s governance structure

The governance and oversight framework for the Lloyd’s market is designed to ensure that both the Corporation and managing agents in the Lloyd’s market have robust and comprehensive systems of governance, risk management and internal controls.