I’ve read about the Lloyd’s of London insurance company and I don’t completely understand the scheme. From what I get, Lloyd’s isn’t a traditional monolithic insurance company; it’s more a market. Several people pool up money and found a “syndicate” that offers insurance to clients. Lloyd’s is a marketplace where possible clients meet the representatives of the syndicates and sign contracts. It’s the individual syndicates that rake in premiums and pay if damage occurs.
Correct so far?
If yes, I have a couple of points that aren’t really clear to me:
[li] Who owns the main body, the thing that operates as “Lloyd’s of London” (and built that funky building in London)? Is it a private company, or an association of the syndicates?[/li][li] Where does Lloyd’s get its revenue from - commission on insurance contracts of the syndicates, licence fees, whatever?[/li][li] How easy is it to establish a syndicate, and who are the people behind - private persons, corporations,…(Not that I’m planning to found one, just curious)? Any new ones added, any old ones dissolved regularly?[/li][li]Is there free competition between the syndicates, in the sense that they fix their premiums on their own, trying to beat other syndicates, just like competition among normal insurance companies?[/li]
If anybody knows more here, I’d be thankful if (s)he could enlighten me.