Reform, Survival and Recovery

By the late 1980s, while continuing to recruit large numbers of new members, Lloyd’s was mounting an increasingly desperate resistance against external demands for further reforms to governance and business practices. The onset of five consecutive years of catastrophic losses, the growing scale of litigation by discontented members facing unlimited calls to pay for syndicate losses and the withdrawal of support for the principle of self-regulation by large sections of the British media and parliament pushed Lloyd’s into making a series of fundamental reforms. Supervision of business practices was tightened and centralised, the outstanding liabilities from syndicates in trouble were detached from the rest of the Lloyd’s market and run off through a new specialist reinsurance vehicle, and corporate members with limited liability were admitted for the first time. These measures enabled Lloyd’s to survive, albeit in an entirely restructured form.