Dead in the Water: Murder and Fraud in the World's Most Secretive Industry

by Matthew Campbell

For most of its history, the money behind the market came from “Names,” the moniker given at Lloyd’s to private individuals who pooled their wealth into underwriting syndicates. In theory, Names bore unlimited liability for losses: if claims were large enough, they could be forced to give up everything they owned. But in practice, premiums usually exceeded claims by a comfortable margin, and Names received excellent returns. The group included British dukes, baronets, members of the landed gentry, banking scions such as the Rothschilds, and commercial dynasties including the Guinness family. The Lloyd’s market was, in effect, an invitation-only investment club for preserving wealth and privilege. From the 1960s, a series of scandals and expensive natural disasters led to a liquidity crisis among the syndicates. To raise more funds, Lloyd’s eased its membership requirements, welcoming the not-so-blue-blooded as Names, including sports stars, musicians—notably, the members of Pink Floyd—and thousands of dentists, doctors, and small-town stockbrokers. But it still wasn’t enough to feed the world’s growing appetite for insurance, not just for ships, but for planes, nuclear power stations, and spacecraft. So in 1994, the leadership of Lloyd’s allowed companies to serve as Names for the first time. The arrival of American and Swiss conglomerates vastly increased the capital available for syndicates to write insurance policies. It also changed the fundamental nature of the place....