A1 AT LLOYDS

Otago Daily Times, Issue 15300, 14 November 1911, Page 8

A 1 AT LLOYDS

A PAMILIAh SIGN AND WHAT IT

MEANS.,

aiumiii, i r "Al at Lloyd's" ie a well-known I phrase, to most people, but many aro unfamiliar with it« real meaning and eignificaiiM. Aβ this ie tho centenary year of Lloyd's—-a hundred years having elapsed since it was established on ite ore-, pout btfsis,—it may not bo uinpproprmto to recall the etory'of this great organieation, the boeiness it dees, and how it doce il. In iho first place, it may bo m well to explain that Lloyd's it not an insurance company. It is eiraply a combina-; tion of individual members, each member transacting Ills own business, but being bound by the common rules. In other words, Lloyd's does not insure as a body, all business being transacted by individual members. These members uivide the risk, each memrkr taking a email proportion : only. — What "Underwriter" Means.— Thus, in tho caeo of a policy for £1000, it ie quite probable that tho risk would be split up between 10 members. Each of these members would sign tho polity, stating the amount of risk undertaken, Aβ the signatures aro written on tho policy one und«r .the other, the meaning of tho term " underwriter" bocorms apparent. In-tho. caeo of a large policy, theio may' be columns ot names, and so it would happen that should a vessel be shipwrecked no individual person would be responsible for the wholo loss; in tho case of disaster no'member would havo to pay more than the amount underwritten by him. It frequently happens that tho fractional Tisk taken by an underwriter may be undfirwrittcn again .by other people', who'will thus eharo his loss, if such occiire. Every member of this great corporation has -to deposit £5000 as wcuri ty with Lloyd's truslwe, and tlicro aro over four millions sterling thus deposited. Independently of this, since tlio end of 1908 every underwriter voluntarily submiUlu'e

accounts to an independent. examination, and k>'long as'hie deposit of £5000 balances his claims, it ie all right. Ifj

not, ho has to find tho rcmiuatc money, either in eecuritce or by fuiniehing guarantors, not ono of whom can guarantee more than £260, and every euch guarantor has, again, to furnish proof of his own power to meet tho responsibility. So it may truthfully bo said that to be a member of Lloyd's meaw you are safe as the Bank of England. It ie a boast of Lloyd's that it has never re-, fused to pay a genuine claim. — Origin of tho Organisation.— Regarding the origin of Lloyd's, it wae etarted about tho year 1688 by Edward Lloyd, tlie first of tho -Lloyd's, who kept a co oo shop in Tower etroet, and who

at the Kimo timo provided such facilities for. Marino insurance that hie name.has olwaye remained as the title of the association'of underwriter* who transact bufiiness under ita auspieffl. The coffee ehop was a favourite resort of eeafaring men, and those who had shipping interests, and as one mail could not have sufficient capital to liandlo all the inerronco l/iieinees offered, Lloyd gathered about him Bomo of these other underwriters into a sort of lociety. In 1692 Lloyd removed to Lombard

street, ono of the most thriving and prosperoua bininem centres in tho metropolis. Four yean later he imiued a shipping paper, which aimed at the dissemination of chipping newe and commercial information, mainly for the benefit of the underwriters who frequented his tavern. Thii was tho germ of whut ie now " Lloyd's list," which, "with tho exception of the London Gazette, is the oldest news sheet in t<he United Kingdom. Prosperity smil-w on Lloyd's underwriters, and other'branches of insurance ' besides that pertaining to shipping and maritime affairs were entered upon. A Wave of speculation epread over Iho country in flic «irrv years of tho eighteenth century, and tfie gambling spirit of the period was mado the rnoet of bv tho enter-

prising insurance body in Lombard street. —An Insuranco Mania.— Anything and everything found ready hcc«pt anco Ma ™k f° r ' Muran i c , e ' The lives of kings, etatcemen, celebrities, and even criminals were gomblod upon in an. amazing manner, and thousands of pounds often hung on the death of men of position, who accordingly ran considerable risk of premature extinction by tho hand of the aeeassin. To such an extent, indeed, did this etna for indiscriminate and wholaale wagering of money grow that, in tho interests of the nation, Parliament was at last compelled to intervene, and the famous Gambling Act, which still remains in force, was pawed. Tho crucial point in this measuro is to the effect that no ipereon may wager money against n certain event unless he possewes an interest which will bo materially affected by the occurrence ot that event. About lh<i year 1774 tho volume and lmportanco of the businere dono by Lloyd's underwriters hid increased to »i'ch an extent as; to mako a removal to larger pre-

miete imperative This was accordingly done in tho year mentioned, quarters bciiict secured in the Royal Exchange. Lloyd's grow and prospered. So much so that its members mado fortunes. Tho veara 18U and 1871 were red letter yenra in the history of tho association, the former witnessing the organ'sation of the comnany on the lines on which it is still conducted, and tho latter tho Act of Incorporation; Phenomenal ie the only word that can adequately describe Uie amazing increase of business that has token place since 1811, and nothing that human ingenuity, enterprise, and efficiency can accomplish has been lelt undone to enable the aMocia-

tion to keop pace with tho mnrtitirao greatness of Great Britain. —In Every Port.— In every port and upon every coast Lloyd's are represented, and at the present moment there are no fewer than 2000 agents etaticned &C over tho globe. Tlu movements of cvety ship from point to point aro known to these men, and, as titty are in constant communication with lieadquarters in London, tiio latter are in a position to answer all inquiries relative to vessels in which Lloyd s aw interested. During a recent year 90,000 telegrams and 82,000 letters wore received,

while 60,1W) vessels wero reported from Lloyd's signal elation in England alone. Aβ Ctoloel Hozier, the lato secretary of Lloyd's, once eaid, " Not one vessel in ten cachea a port of the United Kingdom without ite approach having been previously announced from a Lloyd's itation." Many an anxious eye scans Lloyd'a

4Moming Shtot, cepooinlly if during tho night a torriblo gale has btcn raging on land and eca. Then it is that the full weight and responsibility of his profceeion is acutely realised by tho underwriter. The storm may have played havoc with his financial position, aim by its rwnlta he may rtaud to lose hundreds, perhaps thousands, of pound*. - If the taie arrival of his ship » rejioried hi the .Morning Shoet, then, nil ifl well; but if it is noted Rβ overdue, ho may, be ncijtfd with anxiety, and hnaten to "placo part, if not tho wholo, of his

liability on the shoulders ot hie fellow, underwriters. That i.», he reineuron the risk —not, of courso, at the rato at rlnch ( ho effected it, but probably at a much j grontot flguM. £3 3b per cont. may have been the figure at which ho had taken the insurance when the vcmcl etartxxl on iU

voyage, bqt if he ie 'anxious to_ reinsure it on account of any doubt a* to ite safety he may require to* pay £10 10e for that purpose. ■ By. thu« effecting a transteroice of the riek, on a liability, say of £1000, i he will lose £73 lOe; but, on tho other hand, ho etcod to lose £968 10a if the ship foundered, and ho had not reinsored it. , : —A Rakv Bueinees.— Marine ineiirahw i» »t ill times .a moro or lew ri«kyN«pe<:uJation for (he underwriter, and tnero are occaeion* when ho is esceptionalJy heavily hit. Aβ ft,result of a ecvero galo during a recent winter, which lofltcd two day*, tho value of losses in llritleh watein alone wee reported at Lloyd , * .in over JC260.0C0. On another occnoion, a atorm wne renpoiwible for a lom to th« undorwriteni of £100,000 In a Mnclo day I AoddenU to quite a ecore of ehlpe

were reported dnring tin; few daye in which biisinoM wa« dono that day. About a third of the number wore total wrccie. Meet vessels and their cargoce are m-'

sured nt Lloyd's bofoe setting out.on a voyage. The method of effecting ineitrnncs id einiplo but interesting. _ An underwriter ie approached by an insurance broker, who nave to him, "I have to insure the steamship Saucy Jane for 12 months, Mr ll—, nt six guineas per cent, por annum,, for £20,000. Will you let me put you down for £100!" He does not, by the way, actually eay this in no niany words. Up will probably content himself with pushing a slip, with all particulars wntUm on it, before tho underwriter's nose, but he means it all the same. Tho underwriter ie very liWy quite willing to oblige, and licforc committing himself he probably turns to "Lloyd's ltezifter of British ami Foreign Shipping," which contains particulara of every seagoing vessel of 100 tone and upwards, innd where he will find full details ns to the vessel'* class, age, dimensions, engines, and general qualifications. —The Mark of Merit.— In order to conduct ite affairs, it is convenient for Lloyd's to classify and Ngis-.er ships, and for this purposo it has nutlitiod surveyors at the different principal prts of Great Britain, whoso bueimsa H is to survey ships building, and to report upon their merits before they are entered on the register. Ships in the first class are denoted by the well-known "Al," and they only retain this mark eo long aa they are in a fit and propev condition. IJoyd's have other signs, relating to the ekes and . condition of the different typea of vessels i afloat Marine insurance nud marine information are the- epeciaitice of Lloyd's, but, as most people nro aware, every kind of riek is rmdortakon. Tlie underwriters will ini sure aiiv poraon against pract'cally any I imaginable contingency. The most remarkablo of recent insurances was tho echemo for providing indemnity for disappointment or lose caused by wet weather —a branch whirh lia* a special appeal to the holiday-maker.