The Business of Face-To-Face Interaction – A Visit to Lloyds of London

Knowledge is a funny thing. A lot of people would agree that a firm’s competitive advantage in today’s business world is based on knowledge generation and transfer. Often the word ‘flow’ is used. But how something abstract like knowledge could flow (like water down a river) or be transferred (like money) isn’t quite as clear. Some scholars have argued that knowledge is ‘sticky‘ and cannot easily be stored, printed or distributed. One approach (that I find compelling) argues that knowledge requires a sense-making process to make it actionable. Since sense-making is a human activity, I would argue that knowledge resides inside someone’s brain, and this in turn means that knowledge flow requires interaction between people.

This all came to my mind when I visited Llyods of London as part of Workplace Week. Lloyds is a corporation founded to organise a marketplace for underwriters and insurance brokers to come together in one space to buy and sell risk. Here, knowledge is a key element of everyday work, and the way it works is through face-to-face interaction.

Iconic Lloyds of London building by Richard Rogers

Iconic Lloyds of London building by Richard Rogers

Before the visit I had looked forward to seeing the iconic, now Grade 1 listed Richard Rogers building as an example of an interesting piece of architecture, yet coming out of it, I was more impressed by the dynamics played out inside and how the building accommodates them. The building is as stunning from the inside as it is from the outside, with its large atrium connecting the different floors and providing a workplace for around 5000-6000 people every day.

View from the top floor down into the atrium at Lloyds

View from the top floor down into the atrium at Lloyds

To appreciate the emerging dynamics of space usage and the business of face-to-face interaction playing out in the building, it is important to understand how the insurance and underwriting business works.

Underwriting had its origins in coffee houses, where information on specific markets was systematically collected and shared. In 1688, Edward Lloyd’s Coffee House in Tower Street in the City of London was first mentioned among a competition of another 80 different coffee houses. Lloyds moved into the Royal Exchange at the end of the 18th century and in 1928 moved into its first purpose-built property. The Richard Rogers building was finally opened in 1986.

Lloyds organises a marketplace for the business of underwriting, i.e. insuring risks. Lots of different small companies are registered with Lloyds and participate in this marketplace. The idea of a market is crucial here – everyone is arranged in the same space, but rather than the town square, this is the large underwriting room at Lloyds. The different underwriters have dedicated and clearly signposted fixed desks as workspaces, the so called boxes. Around 90 different underwriter companies are registered with Lloyds and they compete with one another. Underwriters are the buyers in the marketplace, but rather than buying apples or pies, they buy risk. The customers in this market are the so called brokers. They are the ones to bring business into Lloyds, since they want to get something insured. Lloyds’ business started with insuring ships and cargo, but nowadays lots of different things are insured: aeroplanes, satellites, earthquakes, jewellery, body parts – you name it.

While underwriters have fixed desks, brokers do not occupy a specified place in the building; instead they move around.


Various activities of underwriters at their boxes and brokers – seen on the move, standing and on soft seating

Initially, a broker comes in with the need to get insurance cover for something. They approach a lead underwriter, who may work for any of the underwriting companies. It is their role to take on the job, discuss details with the broker and specify a draft policy, laying out terms and conditions of the deal accurately. They often are leaders in their fields of knowledge and have accumulated insight into a particular field or business (e.g. aviation) over decades. With all their knowledge, the underwriter is the one to shape the policy. Once the deal is agreed between broker and lead underwriter, the lead underwriter accepts a percentage of the business themselves, and then takes the remainder of the business to the different syndicates to sell a certain percentage of that risk to their competitors, the other underwriting companies. One company may buy 3% of the risk, another one 7%, another one 4% and so on. Only when all 100% of the risk is covered, the contract becomes valid. Thus both the risk and the profits are spread between the different players in the market.

From its beginnings in the coffee houses of the City to its current form as a marketplace inside Lloyds as a corporation, all business is undertaken face-to-face, so people trade with people, based on negotiations, trust and exchange of knowledge. There is no electronic trading, despite it being the 21st century.

The nature of Lloyds as a place where physicality matters is underlined by the building. Despite its modern look and feel from both inside and outside (glass, steel, concrete), the place breathes tradition and history.

On our visit we were shown the loss book, sitting on a cavern. It is a handwritten record of all losses of ship and cargo, where news are copied into in beautiful calligraphic handwriting using a traditional quill pen. According to our guide, the book is frequently consulted by underwriters, although we didn’t directly see evidence of this while on site.

Loss of property is recorded by hand in a book on public display

Loss of property is recorded by hand in a book on public display

Lloyds is a fascinating building for many reasons:

  • for its dense and intense open-plan layout;
  • for its flexibility that has been built into the building from the very start; despite the challenges of adapting a Grade 1 listed building to accommodate new usage requirements and the issues associated with the layout (for instance many separate entrances), the building apparently has stood the test of time;
  • for its dynamic work processes and constant flow of people;
  • for its curious atmosphere of concentrated calm (despite its density); the place feels slow and serious; a place where knowledge is valued, but the speed often associated with modern finance businesses is intriguingly absent;
  • for its clearly structured interface between two groups of people, whose roles are neatly defined and are very obviously played out spatially – underwriters sit at their wood-panelled boxes, whereas brokers stand, move or are placed on the soft seating dotted around;
  • and last but not least, for its insistence that knowledge-intensive work of this novelty and complexity (i.e. working out the likelihood that a new unknown venture might fail) requires face-to-face interaction between players that trust each other, rely on each other and engage in truly collaborative enterprises despite being competitors. The insurance business would not work without spreading risk among different companies, and competition and collaboration seem to go hand in hand here.


Lloyds clearly is a fascinating example of how a business has grown from one type of space (the specialised coffee houses of  the 18th century) into a purpose-built marketplace, centred entirely on organising the changing (and constant) needs of the collaborative and knowledge-intensive enterprise of insuring unknown risks.

Maybe what can be learnt from Lloyds for other types of businesses is this: to give space to people and allow business processes to flourish with only the simple rule of mutual trust and respect for the accumulated knowledge and insight of individuals. And then to allow for flexibility of space usage without the crippling constraints of a predefined building structure.

One thought on “The Business of Face-To-Face Interaction – A Visit to Lloyds of London

  1. Great post! Thanks – Lloyds is a really nice example to think about knowledge and spatial organisation…who moves where, the mobile brokers to and fro between the fixed underwriters. In fact a great way to think about school too – the post really got me thinking about how we take for granted (in England at least) that primary school kids tend to stay fixed with their teachers (maybe social theories of learning more important) and then secondary school where kids move to teachers’ fixed departmental locations (where disciplinary, more functional theories of learning perhaps take over). If knowledge is socially authorised information or beliefs then fixed location takes on a special role too in helping to socio-spatially organise and authorise info & data into knowledge. Really interesting stuff, need to go away and think!!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s