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SPECIAL PROFILE
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. HOWEVER, ITS ORIGINS, AND IN MANY WAYS, THE ORIGINS OF THE MODERN INSURANCE INDUSTRY, LIE IN THE MODEST SURROUNDINGS OF A 17TH CENTURY COFFEE HOUSE NEAR THE THAMES.
Today, Lloyd's operates in more than two hundred countries and territories around the world. In 2009 it achieved a record pre-tax profit of £3.8 billion and transacted more than £21.97 billion of gross premiums. However, its origins, and in many ways, the origins of the modern insurance industry, lie in the modest surroundings of a 17th century coffee house.
Lloyd's was born in around 1688 at the Coffee House founded by Edward Lloyd in Tower Street near the river Thames in London, later moving to Lombard Street. Coffee had recently become a fashionable drink (the first coffee house opened in London in 1652) and it became very stylish to meet at coffee houses to discuss the business of the day.
Although informal insurance, or distributing or transferring risk, probably started a couple of millennia ago with traders redistributing their load across many vessels to minimise loss, the Great Fire of London in 1666 had highlighted the value of formal insurance.
London was an important trade centre and from its beginnings, Lloyd's Coffee House was a favourite meeting place for ships' captains, merchants and ship owners. The Coffee House earned itself a reputation as the place to go for trustworthy shipping news and, as time went on, for marine insurance.
Business was conducted very informally: a merchant with a ship to insure would request a "broker" to take the policy from one wealthy merchant to another until the risk was fully covered. The broker's skill lay chiefly in ensuring that policies were underwritten only by people of sufficient financial integrity.
From marine to specialist insurance
From 17th century shipping and Lord Nelson's victory at the Battle of Trafalgar, through the devastation of the San Francisco earthquake in 1906, and on to the emergence of space satellite technology in the late 20th century, Lloyd's moved from marine insurance to becoming a specialist insurance market covering such diversities as celebrity body parts to...