Lloyd's of London Issues First Fine
Lloyds of London is an insurance and reinsurance market based in central London. Lloyds is not an insurance company, but a corporate body governed by the Acts of Parliament.
What is Lloyds of London?
Lloyds of London is the British insurance market located in central London. The market acts as an intermediate between brokers, clients, insurance companies and underwriters, so various employees from the insurance industry meet here. The members are referred to as syndicates that purchase insurance and disperse the risks of different businesses and individuals. Each syndicate specialises in a different type of risk and will ensure these risks accordingly.
Key players at Lloyds of London
There are five main groups within the Lloyd’s of London marketplace: the syndicates, the insurance buyers, the brokers, the managing agents and the cover holders. The syndicates include corporations or individuals that offer a certain type of insurance. Insurance buyers are the people or the corporations who need to purchase the insurance.
For risky businesses that may not be insured by a typical insurer, individuals can find specialist insurance sellers at Lloyd’s. Brokers are the middleman for insurance buyers and syndicates. They help to match the right syndicate to the buyer, all brokers at Lloyds must be approved by the Corporation of Lloyds.
Managing agents are responsible for overseeing staff such as underwriters and accountants, they also manage the daily operations of syndicates. Finally, cover holders allow Lloyd’s of London to operate across the world without having a physical building in each country. These are companies that underwrite the insurance policies for managing agents.
Lloyds issues first fine
Atrium is a syndicate member of Lloyd’s, a UK insurance giant and the first company to receive a fine for misconduct. The company was fined £1.05 last month for misconduct, more specifically for the inappropriate behaviour of men towards female members of staff. A collection of underwriters from Atrium have accepted the charges presented in Lloyd’s notice of censure.
Lloyd’s issued a fine because Atrium failed to notify the market about the details of the misconduct, including the names of the employees involved. The notice provided referred to the accused as “Employee A” whose inappropriate behaviour was well known within Atrium.
Atrium has agreed to pay £562,713.50 in fines after an event like an American college frat house initiation. A report from Lloyd’s described a “systemic campaign of bullying against a junior employee over a number of years”. The fine was reduced to 30% by Lloyd’s Enforcement Board, this was still the largest fine given by Lloyd’s in the market's 336-year history.
John Neal, Lloyd’s CEO claimed that “discrimination, harassment and bullying have no place at Lloyd’s”. He believes that all Lloyd’s employees should be able to work in a safe culture where they are valued and respected.
A survey commissioned by Lloyd’s after reports of sexual harassment within the business discovered that 22% of respondents had witnessed people in their organisation ignore inappropriate behaviour. The same survey discovered that 8% of employees within the “Lloyd’s market” had seen sexual harassment in the last year. Only 45% of respondents felt able to raise their concerns.
Atrium had allegedly failed to investigate these claims or act despite the company policies. However, following the £1 fine Atrium has renewed its disciplinary policies and procedures relating to diversity and inclusion. In addition, Atrium plan to introduce new mandatory training on appropriate workplace behaviour.
Overall, Lloyd’s of London has proven that firms cannot ignore allegations of bullying, discrimination and harassment. This disciplinary action set an example for the rest of the insurance industry. Carnegie-Brown, Chairman of Lloyds of London, said “The important thing is we are taking action”. Influential members of Lloyd’s are aware of these harmful dynamics and are actively striving for change. Since the fine, Lloyd’s has set up a whistleblowing hotline and progressed diversity and inclusion policies.
Regulatory bodies such as the Financial Conduct Authority (FCA) and the SRA are also prepared to step in. The Chartered Institute of Personnel Development (CIPD) provided recommendations to address the root cause of workplace harassment.