London company market
The insurers and reinsurers incorporated as companies that write international risks in London alongside Lloyd's syndicates, often on the same placements and following the same practices.
The London market is not just Lloyd's. Alongside the syndicates, dozens of insurance and reinsurance companies, subsidiaries of global groups or specialist firms, write large or specialty international risks from London: energy, aviation, marine, political risk, financial lines, cyber, reinsurance. They are collectively called the company market. They take part in the same placements as the syndicates, often on the same market reform contract, each taking a line in the list of underwriters, and they follow the same practices: leader and followers, model clauses, agreements on handling endorsements and claims. Their difference from syndicates lies in capital structure. A company is a permanent legal person, rated for its own financial strength, that does not benefit from the pooling of the Lloyd's Central Fund. For brokers and insureds, the mix of syndicates and companies in the list therefore changes how the security of the placement is read, and for the underwriter, competition between the two sets the price of London capacity.
Textbook case: a political violence program for a portfolio of West African assets is placed in London at one hundred percent: a Lloyd's syndicate leads with 25 percent, three other syndicates take 35 percent, and three London market companies complete the remaining 40 percent on the same terms, on a single market reform contract.
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