Placing risk at Lloyd’s
The following is a brief synopsis of how risk is placed at Lloyd's.
•A customer approaches a Lloyd's broker (either directly or via an intermediary) with the details of a risk to be insured.
•The Lloyd's broker approaches an underwriter to discuss premium, terms and conditions. If both parties remain interested, a proposal will be made to accept a percentage of the total risk. A number of underwriters may accept portions of one risk (either within Lloyd’s or outside).
•The Lloyd's broker feeds back the proposal to the customer.
•If the customer wants to proceed, the Lloyd's broker prepares a 'slip' with the details of the insurance, which is signed by each of the underwriters that have agreed to accept part of the risk (“subscription”).
•The Lloyd's broker deducts its fee from the premium paid by the customer and pays the net amount to Lloyd's which then allocates it to the syndicates.