Lloyd

A group of insurance underwriters located in London, England. When a risk is underwritten, it is shared by many different member underwriting syndicates. Each syndicate decides what risks it wants to underwrite. Individual investors in the syndicate are called names and are wealthy people with a significant amount of money to invest who are attracted by the large returns. Freak events, such as strong hurricanes in the United States or an unnaturally large number of disasters, can wipe out profits and require the names to invest more money and incur a substantial loss. Lloyd’s doesn’t issue policies itself but it does set standards for its members. Separately, Lloyd’s is also a major reinsurer, which is an insurance company that insures other insurance companies against large payouts, thus allowing other insurance companies to limit their risks.