Lloyd’s of London: Calls to Attract More US Investor Capital
- Lloyd’s of London, the centuries-old insurance marketplace, is grappling with how to attract greater investment from the United States, its largest market.
- Bob Daum, a Florida resident and member of Lloyd’s since the 1980s, who sits on the board of the Association of Lloyd’s Members, describes himself as a “token...
- The reluctance of American individuals to invest directly in Lloyd’s stems from a historical crisis in the early 1990s.
Lloyd’s of London, the centuries-old insurance marketplace, is grappling with how to attract greater investment from the United States, its largest market. While roughly half of Lloyd’s business originates in North America, participation from individual American investors remains remarkably low, a situation one long-time member attributes to lingering concerns over litigation.
Bob Daum, a Florida resident and member of Lloyd’s since the 1980s, who sits on the board of the Association of Lloyd’s Members, describes himself as a “token Yank” within the market’s private capital base. He argues that Lloyd’s needs to actively court US investors if it is serious about expanding its private capital resources. “If the management is serious about private capital, they can’t continue to ignore private investors from the world’s biggest market,” Daum said.
The reluctance of American individuals to invest directly in Lloyd’s stems from a historical crisis in the early 1990s. A surge of lawsuits in the US, primarily related to asbestos and pollution exposure, threatened the financial stability of the market and resulted in significant losses for many individual members, known as “names.” This period saw aristocratic estates wiped out and thousands of investors facing financial ruin.
Following the crisis, Lloyd’s shifted its focus towards raising capital from insurers and financial institutions, rather than relying heavily on individual investors. Today, institutional investors provide the vast majority of capital backing the market, with individual members accounting for only 9 percent.
Daum believes that a fear of potential lawsuits continues to deter American investors, estimating that fewer than 100 Americans currently participate as individual members. He suggests that while increased American participation could open Lloyd’s up to further litigation, it would also strengthen its ties to its most important market.
Lloyd’s acknowledged Daum’s concerns, stating that it “continues to see strong demand from US‑based capital.” The market also noted that the way capital participates has evolved to reflect regulatory requirements and the complex nature of underwriting at Lloyd’s.
Investing at Lloyd’s typically involves setting up or acquiring a corporate vehicle that can bid at auction for portfolios of insurance risks. While the corporate vehicle must be a UK tax resident, shareholders are not required to be, potentially offering access to global investors. However, some advisors suggest that lingering fears of litigation continue to hinder US membership.
“It’s a cycle,” explained one private wealth advisor. “Because people assume Americans were less likely to become members, there isn’t much effort to ask them.”
Others dispute the notion that American investors are being actively discouraged. Michael Wade, an industry veteran, argued that the barriers to entry are primarily due to the complexity of investing at Lloyd’s, rather than any prejudice against American investors. “I don’t think it’s in any case a matter of prejudice against American investors — it’s the sheer complexity [of investing at the market] that creates barriers to entry,” he said.
Alternative routes for individuals to gain exposure to Lloyd’s do exist. Ariel Re, a property reinsurer, has established a Bermuda company allowing overseas investors to access its Lloyd’s portfolio. However, some investors view these offshore structures as less desirable than direct membership.
Gary Wolens, an American investor with exposure to Lloyd’s through a Cayman Islands company, Insurance Capital Partners, expressed a preference for direct membership. “The problem is that you’re not a master of your own destiny,” he said. Wolens has also been a member of Lloyd’s since 2010.
The discussion surrounding American members comes as Lloyd’s reconsiders the role of individual investors within the market. Total capital invested by individuals has increased in recent years, coinciding with broader growth across the market. However, wealthy members still represent a relatively small proportion of the overall capital base.
Some individual members have voiced concerns about being marginalized by the market, citing limited choices for banking services when posting collateral. Richard Brindle, chief executive of The Fidelis Partnership, an insurer at Lloyd’s, acknowledged this sentiment, stating that individual members have been “patronised and marginalised,” but added that his firm welcomes investment from wealthy individuals.
Recent performance data suggests Lloyd’s is on a stronger footing. The market’s combined ratio improved from an average of 108% between 2017 and 2020 to 89% between 2021 and 2025, indicating improved underwriting discipline. However, performance varies significantly between syndicates and managing agents, highlighting the importance of careful partner selection.
The Argenta Group highlighted the potential for US capital at Lloyd’s in a report, noting that Lloyd’s has historically provided double-digit returns on capital. The report suggests that Lloyd’s offers a stable alternative to insurance-linked securities (ILS), particularly given recent concerns about the resilience of the ILS market in the face of increasing natural catastrophe events. Lloyd’s diversified portfolio, spanning specialty, property, casualty, marine, aviation, and cyber risks, provides broader geographic and risk diversification than typical ILS strategies.
Conning, in a report released on , also emphasized Lloyd’s ongoing transformation, highlighting its progress in addressing structural challenges and enhancing global market access. Lauryn Kothavale, a Vice President in Insurance Research at Conning, stated that Lloyd’s ability to blend its heritage with modernization efforts, such as digitalization and capital innovation, underscores its commitment to remaining the world’s pre-eminent marketplace for specialty risk.