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Lloyds of London Tour

4th October 2022

                                         Aldersgate Ward Club Visit to Lloyd’s of London on Tuesday 4 October

17 members met outside the iconic Lloyd’s of London building for our visit and were welcomed by our Master Allan Fallshaw. The building designed by the renowned British architect Lord Richard Rogers in the 1970’s, was opened by the late Queen in 1986. Its radical addition to the City skyline at the time and pioneering example of high-tech architecture, included lifts, toilets and waterpipes on the outside of the building, making for easy repairs and giving the interior a spacious and airy central atrium.

After the necessary security checks at the Visitor Centre, we were divided into two groups and introduced to our guides, both retired underwriters and we moved into the world-famous Underwriting Room. This is where most of the business written by Lloyd’s is still today conducted face-to-face with brokers who place their clients’ risk with specialist underwriters to evaluate, price and accept the risks. Much of the capital available to Lloyd’s is provided on a ‘subscription’ basis, where their underwriters join together as syndicates and where those syndicates then join together to underwrite risks and programmes. Collectively the syndicates insure risks which total more than £35bn in insurance premiums each year. This collaboration combined with choice, flexibility and financial certainty of the market means the underwriters can anticipate and respond to new and emerging risks and create the specialist products and policies that our interconnected world demands. 

Being at the forefront of the insurance industry for three centuries now - from major historical events, great tragedies and technological breakthrough - has shaped Lloyd’s and Lloyd’s has shaped the world. A journalist describing the Underwriting Room in 1859 wrote, ‘Not a breeze can blow in any latitude, not a storm can burst, not a fog can rise in any part of the world, without recording its history here.’

The importing of coffee in 1652 and rebuilding after the Fire of London in 1666 saw the coffee house emerge as a place where people could transact business and where trade and commerce could begin to develop again. In February 1688, Edward Lloyd’s Coffee House in Tower Street was mentioned for the first time in the London Gazette. Being close to the Thames it was popular with ship owners and captains returning from overseas voyages. Entrepreneurial businessmen took the opportunity to sell insurance to ship owners in the event their ships did not return. Decades later it had built a strong reputation and become recognised for shipping news and the place to obtain marine insurance.   

Modern Lloyd’s was born in 1774 when it moved to the Royal Exchange and left the coffee business for good. This was when the Loss Book was introduced and displayed on a lectern in the centre of the Underwriting room and is still updated there today using quill and ink.

Some important dates in Lloyd’s history

1798 - Following the Battle of the Nile when Admiral Nelson destroyed Napoleon’s fleet Lloyd’s Committee raised £38,000 to help the wounded and bereaved and gave Nelson a silver dinner service ‘as a small token of their gratitude.’

1799 - Hamburg’s economy was close to collapse after Napoleon’s activities led to a financial crisis. City merchants collected £1m in gold and silver bullion to be loaned to Hamburg and shipped aboard HMS Lutine that was lost in a storm off the Dutch coast with the loss of all on board and the bullion. Lloyd’s underwriters had insured the cargo and the claim was paid in full. The Lutine’s bell was recovered in 1859 given to Lloyd’s where it now hangs under the rostrum in the centre of the Underwriting room. Originally it was rung every time a ship was lost but it is now only rung on special occasions – the last being at the time of the late Queen’s death.

1877- 1885 - During this period non-marine policies started to be written with the Non-Marine Underwriters Association being formed in 1910. Early risks included civil commotion in Mexico and fires in Chicago.

1904 - The motorcar was invented in 1885 but when first asked to insure one, no guidelines existed and as the underwriters were used to dealing with marine policies, the insurance policies described the car as ‘a ship navigating on land.’

1911 - The first aviation insurance policy was written by Lloyds but stopped a year later after bad weather caused a series of crashes. The British Aviation Association was formed but the venture closed in 1921 after it was reported that there seemed no immediate future in aviation insurance and no business to be had.

1912 - On 9 January broker Willis Faber & Co asked Lloyd’s to insure the Titanic on behalf of the While Star Line. It was insured for £1m (20% of the total £5m capacity of the market at the time). It was the largest-ever marine risk and would become the largest marine loss.  Because covering this unsinkable ship was considered such a prestigious risk the policy was subscribed by all the Lloyds’s marine underwriters and most of the London marine insurance companies.  

1965- the present day - In 1965 the first satellite policy was issued covering damage to the Intelsat 1 communications satellite on pre-launch. This continues with specialist underwriters providing governments, telecommunication firms and research institutes with protection worth US$7bn Today two stages are separately insured, the launch and then the satellite as a spacecraft in orbit. In 1972 the Committee of Lloyds voted to allow women to conduct business in the Underwriting Room. In 1999 Lloyds Asia opened in Singapore, in 2010 Lloyd’s Insurance (China) Ltd was opened in Shanghai. In 2001 the events of 9/11 changed the perception of risk forever. It was also Lloyd’s largest ever single loss impacting many different classes of business and demonstrating the need for contract certainty in the industry.  2011 saw an unprecedented run of natural catastrophes around the world – floods in Australia and Thailand, a massive earthquake in New Zealand, tsunami in Japan and a fierce windstorm season in North America. It was Lloyd’s costliest year on record. Lloyd’s underwriters were the first to use storm records to combine natural science with financial expertise to analyse changing weather patterns. Even today Lloyd’s underwriters are required to consider climate change in their business plans and underwriting models. In 2015 Lloyd’s Dubai became the first underwriting hub in the Middle East and in 2018 Lloyd’s Brussels was launched to secure the markets ability to trade with Europe, to maintain strong relationships with European partners and continue to grow business in the region. All these developments show how Lloyd’s has moved with the times and continues to meet the ever-challenging needs of customers and the insurance industry.

After our fascinating time in the Underwriting Room, we were conveyed by one of the famous external lifts at great speed while also admiring the fantastic view of the City of London, to the 11th floor to see the Adam Room. It comes as a complete shock when you enter, to see this beautiful Adam designed room with its elegant Waterford chandeliers, pale green walls with their white plaster cast decorations. Why here? An amusing story. When representatives from Lloyd’s went to an auction at Bowood House in Wilts. with the aim of buying a fireplace for the Chairman’s Office, when they left, they had acquired the fireplace and the entire room surrounding it. It weighed 30 tonnes and cut into 1,500 pieces before being located in the new building. Finally, we saw the Nelson Collection including the silver dinner service mentioned earlier, his combined knife and fork given to him when he lost his arm, his splendid dress sword, and the logbook from the HMS Euryalus, with the message sent to his fleet ahead of the Battle of Trafalgar in 1805, ‘England expects that every man will do his duty.’ Nelson, seen by Lloyd’s as a man who risked everything to protect Britain’s interests, for his determination, courage, love, honour, resilience and sacrifice is celebrated in this collection.

Source of information – The Lloyd’s Pocket Guide.

We left Lloyd’s and walked the short distance to Ball’s Brothers in Minster Court, time to spend with friends and enjoy a meal together. At the end of the meal, Past Master, Jen Yerbury gave a vote of thanks to Allan for arranging this visit, his last event and congratulated him on a very successful year as Master. 

Diana Morgan Gray

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