The Insurance Insider Monte Carlo 2016 Day 3
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The Insurance Insider Monte Carlo 2016 Day 3

55072 This is a great industry. I love it. I always have done and I always will do.

I worked as a broker for eight very enjoyable and fulfilling years. The business encouraged me to travel, speak foreign languages on a daily basis and befriend as many people as I could along the way.

It allowed me to live abroad and constantly challenged me to come up with new ways of doing old things. I got a lot out of it. It taught me skills that have been useful and applicable in many other spheres of my life.

Then came the bonus. This business didn't mind me leaving to go and do something else for a while. When I came back as a journalist writing about our sector, it welcomed me with open arms. It was like I had never left. I've now spent far longer as a journalist covering our industry than when I worked in it directly.

So let's get this straight - this sector is far better at people management than it gives itself credit for. We're always beating ourselves up about our lack of talent attraction and development skills, yet I lose count of the number of senior figures who strongly encourage their offspring to come and work in the business.

If that isn't a ringing endorsement, I don't know what is.

It is also a moral and honest business.

Okay, not everybody in it is that moral and some are not even that honest, but the sector as a whole is guided by a higher social and moral purpose. Our work helps make good things happen and we deal calmly with the consequences when the opposite occurs.

Meanwhile, the greedy and less-than-100-percent-straight are always found out and ultimately sidelined by the rest of the market.

This may be a global business, but it is one based on collective collaboration and mutual trust between limited groups. If you behave badly word gets around and you swiftly run out of serious counterparties.

The strong strain of natural justice running through the sector means that the bad apples end up being able to do business only with each other. Bad cedants find themselves working with bad reinsurers, with the inevitable long-term consequences for both.

So we are pretty well rounded - what's our weakness?

If there is any failing in this sector it is its tendency to exaggerate the negative and play down the positive.

Some of this comes from a natural humility that is borne of the knowledge that at any time even the mightiest can be swiftly brought down to earth by events.

But even here we are in fact being falsely modest. Our true motive is a canny desire to keep the good thing we have going for ourselves secret from the uninitiated.

The problem is that since the Bermuda start-ups of the 1980s and the classes of 1993, 2001 and 2005, the secret is out. Smart capital has our number and knows that we are a great place to make outsized returns if you can take the volatility.

Perhaps we should never have invited this capital in - but it's too late now. And however bad we think things are getting, today's meagre projected returns are still comparing more than favourably with other investible sectors.

As one senior executive put it on Sunday night, with a post-dinner drink in his hand, standing outside on a terrace overlooking the Mediterranean: "In this industry we always complain, but there are few businesses in the world that are as good as this."

Read here to click the third of our Monte Carlo dailies.

Mark Geoghegan,

Managing Director,

The Insurance Insider

 

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