Guide to Analysing Companies

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LLOYD’S
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grown many times over. Until the late 1990s, the market was
supported by thousands of so-called names, wealthy individu-
als who pledged their assets in support of syndicates that
underwrote insurance risks. Many were attracted by the tax
benefits that accompanied membership but found to their cost
that they could also lose large amounts of money. Names still
exist but are now in a minority to corporate members of Lloyd’s
who operate in a similar way. Uniquely, Lloyd’s has reported its
results three years in arrears, mainly to enable its underwriters
to take into account claims against it before closing off its
accounts.
In its early days, Lloyd’s specialised in marine risks, but it
now covers most areas of the insurance market, particularly
reinsurance. Its strength, though, is in specialised risks such
as aviation, employers’ liabilities and the like. The fact that the
market is made up of dozens of syndicates makes it agile and
fast-moving. Yet this does not make it immune to the cycles of
boom and bust that seem to characterise the international in-
surance market.
Loan
A transaction in which the owner of property (usually money)
allows somebody else (the borrower) to have use of it. As part
of the transaction, the borrower usually agrees to return the
property after a certain period and to pay a price for having the
use of it. When the property lent is money, that price is called
interest.
Loan stock
Part of a company’s capital issued in the form of interest-
bearing long-term loans or bonds. Loan stock can be
granted to an individual or institution that lends money to a
company. It is usually unsecured (that is, it is not held against
a particular asset or assets as security) and carries a fixed
rate of interest.