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Bermuda and Lloyd's - A brief history lesson

A number of Bermuda reinsurers have announced that they are planning to enter the Lloyd’s market. These Bermuda companies, the so-called class of 2002, who are aiming to establish Lloyd’s operations, include a number of companies who were originally companies operating within Lloyd’s, but then decided to move their headquarters to Bermuda because of the enhanced golfing opportunities (surely tax benefits – Ed).

Bermuda-based Lloyd’s
later relocated to London

A number of those Lloyd’s operations had been set up by Bermuda companies looking to invest in Lloyd’s (the so-called Class of 1998). A number of these Bermuda reinsurers were set up in 1994 (the so-called Class of 1994) by Lloyd’s organisations looking to invest in Bermuda.

Bermuda itself was set up as captive by Lloyd’s in the 1860’s, after a group of Names, originally from Bermuda (the so-called Class of 1705) had founded many of the early Lloyd’s managing agencies. Edward Lloyd, a leading Bermudan Name, had established Lloyd’s as a leading coffee house in Bermuda, before relocating its headquarters to London (are you sure about this? – Ed).

A group of mutual insurers covering fire and marine had been formed in the mid-17th century by Bermudan investors, who quickly saw the value of relocating to London. These Bermudan investors (the so-called Class of 1490) had originally come from the London market in 1492 with Columbus to Bermuda in a relocation process caused by excessive taxation and bureaucracy in late 15th Century London.

Footnote: The word “Reinsurance” is believed to derive from an old Amerindian word meaning “A transaction with a company originally from the London Market but having relocated to Bermuda, and vice versa”.