How Lloyd's Works
Lloyd’s is an insurance marketplace where a vast array of risks from around the world are underwritten. It is predominantly associated with the underwriting of specialist risks such as Aviation, Marine and Energy risk although in reality risks of any size can be underwritten. As a consequence of its brand, reputation, market access and license network, many insurers choose to underwrite at Lloyd’s.

The chain of security
The structure of Lloyd’s itself provides a high degree of security, illustrated by the ‘chain of security’, below. Stringent solvency controls ensure that the market meets not only its own high standards, but those of the FSA and other regulatory authorities.
Lloyd’s is a society of members, underwriting insurance in syndicates; each syndicate is required to estimate all its future liabilities and every member must hold assets in trust to meet their own share of those liabilities.
To protect policyholders, premiums are also held in trust, so that liquid assets are available to meet claims and other underwriting liabilities; members must hold additional capital at Lloyd’s as further security.
There is also a Central Fund available, which, at the discretion of the Council of Lloyd’s, covers outstanding liabilities should a member default.

Syndicate level assets
Most claims are met from syndicates’ Premiums Trust Funds (PTFs)

Members’ funds at Lloyd’s
Members’ Funds at Lloyd’s (FAL) are available to meet claims should PTFs or new monies prove inadequate

Central assets
Central Fund and other central assets of the Society are available to pay claims, at the discretion of Council, where a member is unable to meet his liabilities in full

A unique structure
Lloyd’s has been around for more than 300 years, as a consequence some of the terms commonly used when describing how Lloyd’s works are exclusive to Lloyd’s. The business model concepts are analogous to a standard insurer for the most part so simple translation is often helpful. A business at Lloyd’s typically consists of three parts:
The underwriting member This is the entity that takes the underwriting risk. It receives premiums and pays losses like any insurer and is likewise required to put up capital to support its underwriting.
Syndicate
The term most often associated with Lloyd’s. It is the identity given to either members or groups of members supporting an annual underwriting plan. To identify which members are participating on which risks, Lloyd’s assigns each Syndicate a 4 digit code.
The Managing Agent
Perhaps the least known term but not the least important. Their role is to manage the business of each syndicate on behalf of the members participating on that Syndicate. Managing Agents are regulated as insurance companies although they are restricted to managing syndicates at Lloyd’s.
Most businesses at Lloyd’s consist of a Managing Agent managing one syndicate consisting of one member. Asta is a “Third-party” Managing Agent specialising in managing multiple syndicates. It does not take a financial stake in the businesses that it manages so that it can remain independent in the management of each syndicate.

A marketplace fit for the future
In 2019, Lloyd’s launched “Blueprint One”, a revolutionary plan to turn Lloyd’s into the most advanced insurance marketplace in the world. One that is nimbler, faster and innovative – and one that also delivers outstanding products, services and insights to its customers.
Asta plays a key role in developing key areas of the Blueprint, working closely with Lloyd’s and using our experience and expertise to help shape how the market could look in the years ahead.