6.4. Insurance brokers, general adjusters
Lloyd's of London, which originated in 1688 as a coffee house for ship captains and merchants, is the world's most well-known insurance market. Members of Lloyd's are now separated into two categories: brokers, who represent customers for a commission and get reasonable insurance rates for them, and underwriters, who receive premiums and guarantee payments when claims are made. Lloyd's underwriters are required to do business with unlimited liability and offer security held in trust for the amount of business transacted. Underwriters only insure a portion of the entire amount, earning a percentage of the premium paid, and therefore work in groups known as syndicates.
The insurance policies are prepared by the brokerage firm handling its client’s insurance that get details from a Lloyd’s slip (a slip of paper giving information about the insurance). It is then checked, signed and sealed by the Lloyd’s Policy Signing Office on behalf of the syndicates concerned. Premiums and claims between brokers and syndicates are settled monthly by the figures issued from the Lloyd’s Policy Signing Office which also provide statistics of the business transacted. More than forty per cent of the world’s shipping and cargo business is insured through Lloyd’s and its world-wide publications are read by everyone involved in sea freight. Lloyd’s List is a daily paper giving information concerning shipping, and Lloyd’s Shipping Index gives daily movements of over 21000 merchant ships. A lot of information about ships is to be found in Lloyd’s Register of Shipping which classifies ships giving details of their age and tonnage. To be listed in the register a ship must be over one hundred tons.
Lloyd’s is an essential part of the UK economy and it has been an important pioneer in the insurance world. In the seventeenth century it began fire insurance and in the eighteenth century it was the first organisation to insure against theft and burglary. Women and overseas members were admitted into Lloyd’s in 1969 about the same time as they were in the Stock Exchange.