One reason the Lloyd’s market has historically been slow to tackle maritime fraud is that there is no real financial incentive to do so. Even though it costs money to compensate owners for scuttled ships, the market has evolved to respond efficiently to marine accidents, even faked ones, by passing on the cost to someone else. When the number of casualties increases, through an outbreak of war or a spate of frauds, members raise premiums. Indeed, dangerous seas are more profitable, since they mean that customers are more likely to seek the protection of Lloyd’s in the first place.
