Hampden Agencies Limited, Lloyd's largest members' agency, is offering HNWIs the opportunity to underwrite on a limited liability basis, reducing risk to their assets and providing impressive returns. Traditionally, Lloyd’s was the preserve of the very rich but because of unlimited liability this became unattractive. Rich people found out they had a lot to potentially lose. It was a problem that would not go away. Eleven years ago things changed and Lloyd’s offered underwriting through limited liability partnerships. Recently private investors backing Lloyd's insurance syndicates selected by Hampden have benefited from a total return on capital of 62.8 per cent. Nigel Hanbury, chief executive, Hampden Agencies, told WealthBriefing: "There are other attractions. Firstly the double use of assets. If for example you had a portfolio of FTSE 100 stocks you could deposit those as collateral for Lloyd’s underwriting; the dividend flow and so on would remain unchanged." Investors at Lloyd's are able to pledge assets rather than being required to invest cash, so their pledged investments over the same period may also have generated a second and separate return. "The returns from underwriting do not consider what the underlying assets are doing. Some 4 per cent could be added to that figure," said Mr Hanbury. In the case of less straightforward assets that might be unacceptable to Lloyd’s, such as private equity or a holiday home, these would have to be fronted by a bank guarantee. Mr Hanbury said: "It is attactive to family offices because they often have some underlying stock; whatever it was that they made their money from, and this can be used to underwrite with Lloyd's." He also pointed out that the Lloyd’s insurance market is not directly affected by swings in the stock market. "I would go as far as saying it is reverse-corrolated; insurance tends do well when all else fails," he said. Mr Hanbury added: "Perhaps the most important thing to bear in mind is that given Gordon Brown's recent budget, it is getting harder and harder to avoid inheritance tax. An enormous amount of people are paying that. Now 100 per cent of assets in Lloyd's LLPs are inheritance tax free." The results just published are from 2003, in line with Lloyd's three-year accounting system.