A1 v. O.K.

As every British schoolboy knows, famed Lloyd's of London began 260 years ago in Edward Lloyd's coffeehouse, a gathering place of City insurance men. It grew into the world's most potent body of insurance underwriters, still heralds ship disasters by tolling its doleful Lutine Bell,* and through its 2,500 members writes policies on everything from the Queen Elizabeth to Betty Grable's legs.

Not nearly so well known is its 200-year-old sister society, Lloyd's Register of Shipping. It rates the seaworthiness of the vessels that Lloyd's insures, keeps day-to-day tabs on 30,546 ships, and was the first to employ Ai to mean tops. (To get the rating, a ship's construction must be approved by Lloyd's surveyors.)

Union. U.S. counterpart of Lloyd's Register is the 87-year-old American Bureau of Shipping, which handles marine rating for nearly all U.S. flag vessels. Last year Lloyd's and J. Lewis Luckenbach, president of A.B.S., worked out a deal that would divide the world's multimillion-dollar classifying business between them. The A.B.S. dropped its 32-year-old working agreement with the British Corporation Register of Shipping, Lloyd's biggest rival in the United Kingdom, and arranged to dovetail its operations with Lloyd's instead.

Last December the deal fell through. Though neither side would say why, shippers guessed that Lloyd's had wanted to keep the right to classify Japan's merchant fleet, while the A.B.S. claimed it by right of conquest. This week, in what looked like an attempt to freeze out the U.S. firm completely, Lloyd's merged with the British Corporation Register. Thus Lloyd's took over classification of virtually all ships that fly the British flag, and a good percentage of ships of other nations.

Woof. A.B.S. promptly accepted the challenge; it opened its own London office and this week appointed its own surveyors in ten British and Irish ports. The London Daily Express, watchdog of the empire, let out an angry woof: "Ai at Lloyd's [Register] is under fire from the U.S. The men who run America's ships want to ... replace it with an O.K. of their own . . ."

Actually, Lloyd's Register was too big and powerful to be much worried. Both the Register and Lloyd's itself have many ties with the U.S. Lloyd's is not an insurance agency but a meetinghouse for underwriters (who pay $40,000 to belong) and is used by many U.S. business and insurance men to hedge their risks by "laying them off" with the underwriters. They have found Lloyd's underwriters willing to bet on any risk if the customer has an insurable interest, i.e., a customer can insure that a horse will run in a race, but not that he will win. (In 1813, before that requirement, a client insured Napoleon's life & liberty for -L-500.) Four-fifths of all U.S. commercial airliners are reinsured with Lloyd's members; its syndicates paid out millions in claims after the Texas City disaster.

Well aware of the close tie with U.S. shippers, Lloyd's Register tried to soothe the American Bureau of Shipping by saying: "There should be many opportunities in the future for cooperation . . . for the benefit of world shipping."

* Salvaged from a frigate which sank off the Dutch coast in 1799 with -L-1,000,000 in gold aboard, ruining many underwriters. The bell hangs over Lloyd's center rostrum, is rung by a "waiter" in scarlet and gold. One stroke means disaster at sea; two mean good news.

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