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

by Matthew Campbell

The newest threat to the occupants of One Lime Street was the novel coronavirus, which was expected to cost Lloyd’s members at least 6 billion pounds as companies claimed on policies covering unexpected business interruption. Globally, the insurance industry responded with increasingly creative ways to avoid having to compensate clients. Early in the pandemic, an American law firm asserted that since the virus was microscopic and could only survive temporarily outside the human body, the damage it caused wasn’t physically quantifiable. Insurers seized on the defense enthusiastically. The first of hundreds of lawsuits to decide the issue began in December 2020, when a New Orleans restaurant sued in Louisiana District Court for the money lost when it was forced to close. The defendants were listed as “Certain Underwriters at Lloyd’s, London.” The industry’s pugnacious attitude toward that and similar claims offered a sharp contrast to its historic ambivalence about scuttling. In the UK, Lloyd’s members took a test case on COVID-19 payouts all the way to the Supreme Court, and lost. The pandemic caused one of the worst years in living memory for London’s insurers. Lloyd’s had to close its historic Underwriting Room twice in 2020, forcing underwriters and brokers who’d spent a lifetime making deals face-to-face into unfamiliar digital interactions. It was awkward but it worked, just well enough. The market kept on going, even as the Lloyd’s corporation, which operates it, swun...