RISK MANAGEMENT in the LONDON MARKET

Where & Why ? Lloyd’s of London is the specialty insurance marketplace. Lloyd’s fills the need for Difficult or Unusual placements. Some of their interesting placements have been: – silent film comedian Ben Turpin's eyes against uncrossingBen Turpin – Marlene Dietrich's, Betty Grable's, [22] Brooke Shields's, and Tina Turner's legs Marlene DietrichBetty Grable [22]Brooke Shields Tina Turner – Jimmy Durante's nose Jimmy Durante – the hands of the 1932 World Yo-Yo Champion Harvey Lowe [23]Harvey Lowe [23] – Keith Richards' fingers Keith Richards

Need for a Catastrophic Marketplace – In our case: Hurricane Georges 1998 started it all – – Unexpected and unpredictable – it can happen to you – Loss of legacy market (perfect storm) : » Blanket limits » Low Deductibles » Viable Marketplace with financial stability » Comfortable terms We are still at Lloyd’s today.

What is Lloyd’s of London First insurance market – originally a Marine market (around 1688). – Located in the City of London – Group of individually owned ‘syndicates’ operating in one environment – Governed by strict standards under British law & Lloyd’s internal controls – Ownership by individual ‘names’ (originally) or, now, names (14%) plus insurance and/or investment companies.

How are they different?

The ‘BOX’ Originally Underwriters worked only from a ‘box’ on the ‘floor’: – The working floor of Lloyd’s is set up with open workstations where underwriters receive agents – Agents historically lined up at the ‘box’, presented their coverage needs and were either rejected or accepted. – If accepted, the underwriter signed and stamped a ‘slip’, defining the extent of coverage and participation.

Keeping up with the Times Today Lloyd’s syndicates maintain their traditional boxes but most business is written out of their offices. They still utilize ‘slips’, sign and stamp them.

Sample Slip

Traditional Lloyd’s Major losses still trigger the ringing of the bell

Business attire is still strictly enforced in London. Women were not allowed on the Lloyd’s floor until recent times – still you see few women in Lloyd’s, however, the first female chief was recently installed. Access is permitted by non-licensed guests when accompanied by a licensed agent.

IF YOU NEED TO USE LLOYD’S Elect a strong ‘lead’ syndicate – others will follow Know your risk inside out – They trust a good RM and will underwrite for you – Do the engineering – Understand specfic risks for your company (ex. dust) and talk to your mitigation – tell the story! – Understand market influences Underwriters are fickle, nervous and reactive

Know your policy needs – In a soft market – they come to you – In a hard market – you go to them – Be sure all markets are following ONE form – Name a claims adjuster

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The Final Program Market pricing is used. Audits conducted by KPMG