Insurance probably made a beginning in the ancient land of
This was similar to the system of insurance known as bottomry which existed in
Insurance as we know it today took its shape in 17th century
Any insurer who wants to become a member of the association has to deposit a certain fee as security for the regular payment of his liabilities. The association will inquire about the financial position of the concern, business reputation and experience. The business is conducted by these insurers called underwriters, syndicates etc. Anybody desirous of taking insurance will approach the ‘underwriters’ and not the ‘association’. Each underwriter will be responsible for his business underwritten. Usually, the policy is underwritten by several underwriters and their share or portion is fixed individually. If there is claim on the policy, the insured gets the money from all the underwriters according to their respective shares. If an underwriter fails to pay, the amount is realized from the security taken at the time of enrolment from the underwriter. Lloyd’s as a corporation is never liable on any policy.
Lloyd’s brokers bring business to the market. The risks placed with underwriters originate from clients and other brokers and intermediaries all over the world. Together, the syndicates underwriting at Lloyd's form one of the world's largest commercial insurers and a leading reinsurer.