Lloyd's of London

Names and More Names

In 1950, Lloyd's of London limited its exclusive list of Names to 2,743 investors, most of whom were located in England. Over the next five years, the number of Names increased to 3,917. The next two decades saw steady increases in the number of Names as the list grew from 5,828 in 1965 to 7,660 in 1975. The most astonishing rise in Names began in 1975 and continued until the late 1980s as Lloyd's struggled to recoup substantial losses from a number of claims filed in the wake of disasters, both natural and human-made.

By 1985, Lloyd's boasted over 26,000 Names, and the number of investors continued to rise, with approximately 15 percent of the total being American and Canadian Names. Many of the North American Names were recruited by “members' agents” who received hefty commissions on the number of Names they recruited. It was later claimed that the North Americans Names, as well as those from other countries outside England, had been specifically recruited to bear the brunt of Lloyd's losses.

Most of Lloyd's North American Names were upper middle-class professionals and business people and their spouses. The Names were attracted to Lloyd's because of its stability and the guarantee of a quick return on what seemed to be a no-risk investment. On the surface, the method of investing in Lloyd's seemed simple: Individual names placed at least $150,000 in stocks and bonds in a Lloyd's account and pledged at least $400,000 in additional assets and credit. Technically, the funds were available to Lloyd's to pay out claims. However, Lloyd's rarely needed to tap the accounts for large sums, so the funds steadily grew as premium payments were paid into trusts that each syndicate opened for its Names.

These approximately 400 syndicates made up what was essentially a lot of small companies under the Lloyd's of London umbrella. The amount received from premium payments varied according to the amount deposited in each Name's Lloyd's account. Likewise, when Lloyd's needed to withdraw funds to cover its losses, the amounts taken from each client were based on each Name's share of the total premiums issued by the syndicate. Each Name retained ownership of his/her Lloyd's deposit and earned profits according to the amount of pledged assets. It was common practice among English families who had inherited family property without sufficient funds to keep up their estates to become Names by pledging their lands as assets, allowing them to maintain their property with profits from Lloyd's accounts.

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