Reg Brown's letter (Insurance Times, July 12th) raises interesting questions about under-qualified and under-performing underwriters at Lloyd's.
This was a problem first identified during the last loss cycle, when Lloyd's acquired a well deserved reputation for almost criminal levels of incompetence with the wider public, while repeating to itself the usual rubbish about being “the greatest concentration of underwriting talent in the world”.
It must be obvious that the attempt to rid Lloyd's of incompetent underwriters is very much an easy option. Lloyd's regulator
David Gittings should be reviewing members and managing agencies. And why stop there? There are no qualifications required to be a member of the Lloyd's ruling council and, indeed, ignorance about Lloyd's and insurance is an actual prerequisite to be a nominated member of the council.
Neither Lloyd's, nor companies within Lloyd's, prefer to recruit graduates, favouring “market experience”, and qualifications are neither respected nor rewarded.
Coupled with the notoriously poor starting salaries, why should anyone be surprised when the 16-year-old unqualified trainee broker, who becomes the 40-year-old unqualified active underwriter, finds himself out of his depth, loses money and is eventually sacked, with his replacement recruited from the same pool.
The problem of under-performance at Lloyd's is a structural one. The cronyism and politicking of market associations and freemasonry, institutionalised secrecy, partial regulation and the democratic deficit within the society actively militate against people of honesty and worth.
The response to the question, “Where is the talent coming from to replace those underwriters we have got rid of?”, is that those people have taken a hard look at Lloyd's and decided it is not for them.
It is very noble of Max Taylor to promote the Chartered Insurance Institute (CII), especially considering he does not have a CII (or any) qualification. Similarly, Mr Gittings requires underwriters to hold a qualification he does not possess himself (and nor, incidentally, did the director of the Lloyd's Training Centre).
We should contrast this attitude of recruiting people into Lloyd's, who frankly are not bright enough to get into any other profession and are prepared to accept a contemptuous starting salary out of desperation, with the attitude adopted by merchant banks and lawyers to recruitment. They look on us with deserved and ill-concealed scorn and make their money out of our incompetence and inefficiency.
Conflict of interest?
The latest episode in the Independent Insurance saga hit us last week, when Road Runner refused to pay commission to us on an Independent Road Risks policy renewed through them in March this year, long before the problems with Independent surfaced.
Independent's spokesperson said all payments relating to Independent were frozen and we would not be given any commission.
If Road Runner had paid us in reasonable time, we would have already had the commission before the Independent problems arose. The cancellation of the policy would, of course, have incurred a commission refund, which is quite acceptable to us.
In addition to the above, the Road Runner spokesperson also made it clear that we could not expect to receive commission on the policy that we placed with them as a replacement for the original one.
We have already experienced the £20 surcharge applied by Road Runner when offering a replacement policy for Independent, but this latest episode is beyond belief.
Mike Slack, who not only runs Road Runner but is also the chairman of the Association of Insurance Intermediaries and Brokers (AIIB), which exists to protect the interests of intermediaries, seems to have a slight conflict of interest here. We tried to speak to him, but the Road Runner telephonist would not give us access to his office.
Hedon Insurance Consultants
Regulating the regulators
The first two letters in the July 26 issue of Insurance Times prompt me to refer back to Mike Slack's letter in the March 22 issue.
As stated by Steven Hewitt, brokers were obliged to identify fees under Insurance Brokers' Registration Council (IBRC) rules, a body with which we voluntarily registered. Mike Slack was not registered with IBRC but did he not incorporate a similar requirement in the AIIB code of conduct?
Turning to David Mackie's letter on financial soundness, Mike Slack also stated that the General Insurance Standards Council (GISC) would provide a level playing field.
As Mike Slack is on the GISC, who regulates the regulators?
Independent Insurance's solicitors gave Indie in excess of six months' credit and got caught with a huge bad debt. Now they are trying to recover the money from insureds.
Their position in law is dubious at best.
In any event, they have surely prejudiced the insureds position by giving them so much credit.
Would these firms of solicitors have given the insureds upwards of six months' credit? They would not.
I think the broker community might want to consider whether they will accept these panel solicitors in future.
Technical services manager
British Insurance Brokers' Association
While perusing the latest Chartered Insurance Institute (CII) journal, I did not notice any remark about the absence of its president (Michael Bright), which I would have thought rated as headline news and certainly essential information for the membership.
The CII and the rest of the industry no longer wants to be seen as a lumbering old dinosaur, but instead as dynamic, pushing forward and cutting edge.
I can only conclude, therefore, that either there are heads buried in sand somewhere, or perhaps the old dinosaur hasn't noticed he's gone yet.
Name and address withheld