The London Market

It's the strangest thing in London...it's actually cool to work in insurance.  It's very different here from the US, in that there's a whole "specialty" business here, where the things that get insured are very unique.  So, it's not so much your car insurance policy, as it is oil rigs and JLo's derriere.  Seriously.

So, a short history lesson.  Insurance, as you know, is a venue for risk management in which the risk of financial consequences associated with an event that may occur in the future are transferred from one party to another for a fee.  I didn't even look that up...apparently I am learning at work!  The risk management process goes back to ancient traders (we're talking BC here, folks), when merchants would spread their products across multiple ships to be transported, to make sure that one event wouldn't ruin their whole inventory.  This, I did have to look up.  Anyway, thousands of years happen, and now we are still managing risk by having fire extinguishers, door locks, and insurance policies. 

"The London Market" is the term used to describe the specialty insurance market over here.  They trade specialty risks, often through Lloyd's of London.  According to Wikipedia, "In the late 1680s, Mr. Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the leading market for marine and other specialty types of insurance." 

Every day, insurers actually physically go to booths at Lloyds' and meet with brokers to make deals and take on these speciality risks.

As you can see, there are no online quotes, or geckos, or annoying advertisements involved.  It's like doing business many years ago, and it's highly based on the expertise of underwriters (the people who decide what risks to take on and the terms of each policy).  The Lloyd's building looks like it's inside out, with the pipes and vents on the outside of the structure.  I work right down the street.

It seems odd to me that such a historic method of conducting business takes place in a building that looks like a spaceship.  It still fascinates me that a business model that began in the 1600s is still used today, but with more modern tools for evaluating potential business.  Pretty cool, but very different than my experience in the US.  It's been fascinating so far to learn about how we do business here, and work in such a different part of the organization.  So, now you know why Derek and I have been sent here in the first place.  I promise my next post will be unrelated to work!