Touristy Lloyd's
WHY, Sir Noel Coward would ask, do the wrong people travel? A similar lofty atti- tude can now be discerned in the high hall of Lloyd's: why do the wrong names join? More and more of them scramble to get in, crowding what once was an idiosyncratic private resort, insufficiently overawed by its splendours, changing its character, mak- ing a scene when the bill arrives — and even defying all tradition by refusing to pay it. Lloyd's now has more than 33,000 members, and there is talk of stiffening the qualifications for membership, requiring candidates both to show more means and to put down more cash. It is a novel predicament for Lloyd's, which has spent most of the last 20 years putting word around that, exclusive club as it is, it might have rooms for a few more suitable mem- bers. In fact it was trying to repair its capital after the losses of the 1960s, when Hurricane Betsy cost the present-day equivalent of $7.5 billion. Lord Cromer, former Governor of the Bank of England, was asked to advise on capacity (the business Lloyd's could do governed by the money available to back it). Women were let in, and foreigners, and 'mini names', with pocket-sized liabilities. Today the average member of Lloyd's is a good deal more of a mini-name than his predecessor a generation ago, and more likely to be dependent on his reinsurance through 'stop-loss' policies, some of which are now the subject of serious dispute in the mar- ket. Today, suddenly, there is not enough good business to go round the mem- bership, which has already learned to seek relief from the cost of unlimited personal liability, demanding to be bailed out by the Council or through the courts. Lloyd's ought now to consider how to raise the quality of the existing membership and shake the weaker names out. A special levy, to be paid by new members on joining — and distributed among those who resign? A market in membership, like the market in seats on exchanges? The positive response would be an active policy of opening up new business for Lloyd's to match the capacity, and that is now needed most of all.
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