LLOYDS

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LLOYDS

• Yelena Shiroglazova
• Marat Zhamanbalanov

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Sources

• (2004) Insuring for the future Economist, Vol.
  372 , p71-74
• http//www.lloyds.com

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IF YOU had to invent an insurance market, youd
never invent LLOYDS
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Relationship to textbook

• Lloyds of London, pp 35, 243, 249-251

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History of LLOYDS

• 1688 Edward Lloyd opened a coffee house
• 1769 A break away group of professional
• underwriters establish
• New Lloyds Coffee House
• 1774 The modern LLOYDS had been born

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What is LLOYDS?

• LLOYDS is the worlds leading specialist
  insurance market, home to 45 managing agents and
  66 syndicates, which offer an unrivalled
  concentration of specialist underwriting
  expertise
• LLOYDS is not an insurance company but a society
  of members, both corporate and individual, who
  underwrite in syndicates on whose behalf
  professional underwriters accept risk

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Explanation of the market

• Members of LLOYDS
• Syndicates
• Managing agents
• LLOYDS brokers
• Local brokers

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Business strategy

• LLOYDS implemented a new franchise model in
  2003, which changed LLOYDS status from
  regulating the market to commercially managing
  the market
• The LLOYDS Franchisors role encompasses three
  core streams of activity
• -
  Capital management
• -
  Franchise performance
• - Risk
  management

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Lloyds Today
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Changes

• Eliminate paperwork computerizing
• Annual accounting system (vs. three years)
• Making company centralized

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Policy Changes

• Internationalization of business
• Company orientation vs. individual (less risky
  projects)

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Sources of Capital in 2004

• 752 corporate members provided 13.092
• 2048 individual members provided 1.869

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Computerizing

• No paperwork
• Saves time
• Accuracy of information
• Secure and organize information
• Introduce unique system for the Co

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Accounting System

• Accept U.K. GAAP
• Increase transparency
• Attract capital

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Any questions?
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Questions

• Lloyds is an insurance company.
• True
• False
• Who place risk in the Lloyds market on behalf of
  clients?
• Underwriters
• Brokers
• Managing agents
• Franchisor
• Why did Lloyds decide to accept U.K. GAAP?
• Increase transparency
• Attract capital
• Fit the U.K. accounting legal system
• Keep track over profits
• All of the above
• A B only