A view from the inside

Last November I wrote a short article exploring some financial connections to coffee, including the Lloyd’s insurance market, the roots of which can be found in a 17th Century London coffee house. As luck would have it, I was recently fortunate enough to visit the Lloyd’s building in Lime Street for an informative and fascinating tour.

The Lloyd’s building is famous for its inside-out structure; all the service elements, the lifts, water pipes, staircases, even the toilets, are placed on the outside, maximising the internal space for business. And the largest part of that space is the underwriting room, known simply as The Room, a misnomer if I’ve ever seen one – it’s huge.

Lloyd’s is not an insurance company, rather it is a market that brings together brokers, with the risks they need to cover, and underwriters, with the knowledge and expertise to provide the insurance. Some are general in nature; buildings, ships, aircraft etc. though strangely not a lot of life insurance, and some are more esoteric – pianists’ fingers is an oft-quoted example.

With centuries of history behind it, Lloyd’s performs today in a very current, or even futuristic market. It is a fascinating construct that encourages innovation whilst embracing tradition. When Edward Lloyd rented out tables in his coffee house in the 1680s he called them ‘boxes’. Today’s underwriters sit at square enclosed desks, raised a few inches off the floor, which they still call boxes. Brokers bring to the underwriters the risks they need to insure, some very unconventional, and sit on stools alongside the box. I don’t know if it is the case, but I would like to think that is where we get ‘thinking outside the box’ from.

The building itself, built in 1986 and which we have already noted is very modern in style, contains a room that was designed in 1763 by Robert Adam. In 1956 representatives from Lloyd’s travelled to an auction at Bowood House in Wiltshire intending to purchase a marble fireplace for the Chairman’s new office. In the event they bought the whole room, which was cut into 1500 pieces and transported to London. When Richard Rogers was asked to design the 1986 building he was tasked with incorporating the Adam Room into the new building. The room’s breath-taking classical elegance is a striking contrast to the modern design that surrounds it.

Originally, Lloyd’s only wrote marine insurance, until 1877 when Cuthbert Heath wrote the first burglary, hurricane and earthquake policies. Then in 1904 Lloyd’s wrote the first motorcar policies. However, the motorcar concept was still too new, so the policy document described the car as a ‘ship navigating on land’. I love that – this weekend I will be navigating my ship round the A406, fair winds permitting.

Lloyd’s is, of course, most famous for shipping insurance and since 1774 has maintained the Loss Book, a system of record-keeping that continues to this day. The Loss Book records the details of ships that have been lost, and is still written up in the traditional way with a quill pen and ink. The Loss Book stands beside the Rostrum where we find another great Lloyd’s tradition – the Lutine Bell. In 1799 HMS Lutine was despatched to Hamburg with a cargo of £1m in gold and silver. She foundered in bad weather off the Dutch coast with the loss of the captain, the crew and the treasure. Lloyd’s underwriters had insured the cargo and the claim was paid in full. In 1859 the bell was salvaged and returned to London where it now hangs in the Rostrum in the centre of The Room.

The Lutine Bell has traditionally been struck upon the arrival of news of an overdue ship. One chime announced a lost ship (the bad news) and two for her safe return (the good news). The bell was originally sounded to ensure that all brokers and underwriters were made aware of the news simultaneously. Modern communication technology means this is no longer necessary, so these days the bell only rings to mark special occasions. It is rung once when a member of the Royal Family dies, and to commemorate disasters, such as the Asian Tsunami and the London Bombings, and is always rung at the start and end of the two minute’s silence on Armistice Day.

I have only scratched the surface of what is a fascinating history and building. I recommend you visit it if you can but, unless you work in the insurance industry, I’m afraid you won’t be able to (I could only go because I am a member of the Chartered Insurance Institute); however, I believe that Lloyd’s has previously taken part in the annual Open House London programme, where normally closed buildings are opened to the public for two days in September, the 21st and 22nd this year. The list of buildings for 2019 hasn’t been published yet, and I don’t know if Lloyd’s will be participating again, but more information can be found here, and if you do get the chance I would urge you to visit.

Link for Open House London https://openhouselondon.org.uk/plan-your-weekend/


Philip Chandler FPFS, CFPTM, Chartered MCSI

Chair of Aspinalls Technical and Investment Committee