A few years ago a Lloyd’s of London broker offered an anecdote to explain the insurance market’s unique (ahem) culture.
A transport tycoon needed a ship insured. Everyone in the market knew the ship was as dodgy as he was, having crashed or narrowly avoided crashing on its last three trips.
A female broker was approached by the tycoon’s fixer. She advised her firm that the ship was a terrible risk, uninsurable.
He moved on to a male broker, one he played golf and got drunk with.
The male broker said it was doable, but that it required a huge premium.
The ship made it across the sea without incident. The broker was a hero, having earnt his firm a huge profit and himself a delicious bonus.
The female broker was mocked – plainly, she didn’t know how to assess risk.
A year later, the same ship, now insured elsewhere, crashed into a blameless boat that the female broker had insured. She was fired.
Yesterday Lloyd’s of London issued a £1 million fine to underwriter Atrium for “systematic bullying” and sexual harassment of female staff on an annual “boys night out”.
This night out was recently, not in 1985.
The culture of Lloyd’s of London looks stubbornly resistant to change, still seeming to resemble nothing so much as a lads piss-up at the cricket.
Why? I think it is because the product is different from others in the City. Our shipping tycoon, even were he honest, doesn’t care much about what it costs to insure his boat. He can afford it. So his people don’t care either; they just want to know the insurer can pay should things go awry.
So they go with the broker they know; the one they have shared secrets with over numerous drunk days out when business was the last thing on their minds.
It is out of date, to say the least.
