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Lloyds of London

Lloyd's is the world's leading specialist insurance market, home to forty for managing agents and sixty two syndicates, which offer an unrivalled concentration of specialist underwriting expertise and talent. They are the world's best known but probably least understood insurance brand. This is because they are not an insurance company but a society of members, both corporate and individual, who underwrite in syndicates on whose behalf professional underwriters accept risk. Supporting capital is provided by investment institutions, specialist investors, international insurance companies and individuals.
The total volume of business which a member can underwrite in any given year is measured in terms of the total amount of insurance premiums which the member can accept. By allocating capital support to each syndicate each year, the members govern the amount of business that each syndicate can underwrite each year, the syndicate capacity. The total capacity of their market in any given year is the aggregate capacity of all syndicates for that year.

The capacity of the Lloyd's of London insurance market has increased in 2006 to 14.8 billion Euro . This represents an increase of 8 percent on 2005 opening capacity of £13.7 billion. This reflects their responsiveness to evolving market conditions. Their capital base remains diverse with no single capital provider providing more than 6.8 percent of the market's total capacity. There is considerable geographic and industry diversity among capital suppliers as the chart below shows.
Each member of the company is required to provide capital as security to support their total underwriting business. This is known as Funds at Lloyd's which determines the amount of insurance business a member can underwrite. The amount of funds required from members will vary, depending on the perceived level of risk in the business which they underwrite. This is known as enhanced capital requirement or ECR. The underlying capital provided by members in support of their underwriting has increased from £9.5bn in early 2005 to over 10.0bn  Euro at the start of 2006 to support the increase in underwriting.
Today Lloyd's of London is the world's leading insurance market, housed in an award winning modern building in Lime Street in the City of London. Its origins, however, lay in the more modest surroundings of a 17th century coffee house.

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