Lloyds

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Lloyd's of London

An insurance and reinsurance market in London. Active since the 1600s, it is not a company, but instead a society of individual and corporate members, who come together to spread and pool risk between themselves. Thus, Lloyd's insurance policies are backed by the financial stakes of its members. Lloyd's does not underwrite policies itself (it leaves that to members). but instead acts as a de facto regulator for the conditions under which its members offer policies.

Lloyd's has a three-tiered corporate structure: members, managers, and syndicates. Members provide capital and employ one or more underwriting syndicates. Managers provide the business infrastructure to syndicates for insurance and reinsurance policies. Syndicates underwrite risks and handle claims on particular policies. Complex and/or expensive policies often involve multiple syndicates. Lloyd's also employs brokers and service companies to facilitate transactions between clients and Lloyd's.

Lloyds (of London)

a corporation whose membership comprises a group of some 31,000 INSURANCE BROKERS and INSURANCE COMPANIES engaged in the UNDERWRITING of INSURANCE risks. Lloyds itself does not perform any underwriting business; its member brokers and insurers either act individually in arranging insurance cover for clients, or, in the case of particular types of insurance risk, operate together on a consortium or syndicated basis. What Lloyds does is to provide a forum for organizing syndicated insurance groupings and to validate the integrity of its members in the eyes of the public (i.e. members of Lloyds are expected to conduct their business in a fair and honest way and to deposit funds with it as a surety).