Star Power Fading from Underwriting Departments
Insurance Experts' Forum, September 30, 2013
A term coined in Spain, Los Galácticos were the soccer superstars expensively acquired by Real Madrid following a policy at the time to construct a world-class team by bringing together the most talented, prestigious and marketable players on the planet. The glamour of signing Luis Figo, Zinedine Zidane and David Beckham and the spectacle they produced together on the field was fantastic, but the club ultimately failed to build long-term sustainable success. Indeed, any whiff of a Galácticos policy these days is much derided; detractors point to the huge amount spent on prima donnas often incapable of fitting into the framework of an established side.
A far cry from all that glitters at the Bernabéu Stadium, but there was a time when the London insurance market was also the home to a number of Galácticos. Much feted by brokers and their clients, a small group of colorful underwriters with flair and an eye for a deal once ruled the roost, especially so in the Lloyd’s arena. Unfortunately only a handful of them survived the huge losses that emerged from the troubled 1980s and '90s with reputations intact. Since then, the reformed industry has cast a wary eye toward those risk takers who dare to be different. Few businesses now appear at ease nurturing individual brilliance in our monochrome world, where conforming to models and rules is paramount.
This is a point that was demonstrated in this year’s ranking of the top 50 underwriters published by Gracechurch Consulting. The chart contains a talented, bright bunch for sure, but as Gracechurch’s Ben Bolton intimated in a recent interview with Lloyd’s, “best practice today is all about teams not just the individuals” and these guys (they are nearly all men, still) are most definitely team players. That the top ten underwriting firms employ more than two-thirds of the underwriters on the list also suggests that the days of the swashbuckling privateer are well and truly over.
The leaders of tomorrow who emerge from this group will have deftly climbed the corporate management ladder, though it's less likely that they will have been as inventive on the trading floor as the underwriting Galácticos of a past generation. Of course nobody would welcome a return to the excesses that accompanied all the creativity of back then. Yet those that run and govern today’s industry should consider whether they are cultivating an environment that is so undynamic now that gifted individuals have no space at all to flourish. If conformity is king, then London may struggle to recapture the spirit of innovation widely viewed as the key to securing the market’s position on a global stage.
This blog was originally published on Roger Bickmore's website, "The Lookout."
Roger Bickmore is the Group Business Development Director at Kiln Group, insurance underwriters at Lloyd's of London.
Readers are encouraged to respond to Roger using the “Add Your Comments” box below. He also can be reached at firstname.lastname@example.org.
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