The Intelligent Quarterly from the publishers of The Insurance Insider

Summer 2018

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The Insurance Insider Monte Carlo 2017 Day 1

Awards acceptance speeches are usually quite predictable.

But when a Cat-5 hurricane is hurtling towards Florida, predictability is the first casualty.

Add to that one of the award recipients being someone as independent-minded as John Charman and the chance of a major surprise receives a big upgrade.

At the Insider Honours in London on Thursday night (7 September), Mr Charman told a 600-strong audience of peers that the industry was about to experience a "night of the long knives" in which some of the suicidal decision-making of the past few years would be exposed.

The deserving would come through the ordeal and those that had ignored the basic laws of our business would not.

Out in the hall the mood was not quite sombre, but certainly less celebratory than in previous years.

There was a quiet confidence that everything that could be done had been done - the pre-storm to-do list had been carried out to the letter. But a nervousness was palpable.

A standard conversation with a senior executive at a carrier on the night would begin with the confident expression that his or her organisation was sure it had its house fully in order. But in almost the same breath that person would confide that they knew of at least two peers who were likely to have a rude awakening.

And just as for a nervous traveller shutting up the house before going on summer vacation, the lingering doubts and nagging questions were never far away:

"Did I shut off the gas?"

"Have I cancelled the milk and newspapers?"

The industry equivalents are:

"Do I really have an accurate handle on my aggregates?"

"Will my reinsurance/retro perform the way I am expecting it to?"

"Will the loss go into the gaps, or expose new ones?"

"Will this event throw up new clashes that I hadn't thought of?"

"Are the politicians going to make me pay for things that are definitely not covered and for which I haven't been collecting any premiums?"

The only rational answer to these questions is wait and see - all will be revealed next week and beyond.

The original night of the long knives was a savage purge carried out in Nazi Germany in the summer of 1934. Internal and external rivals were rounded up and killed and Hitler's supreme grip on power was consolidated.

Our version will be different - and happily far healthier.

Our major events never allow a single winner to take all.

Yes, the weak get killed, but in our version of Depression-era Germany, new parties would be formed, the Nazis would be forced into coalition or out of government entirely and the Second World War would never take place.

Reinsurance and protection is not a one-party state - customers cannot allow outsize concentrations of power. Prudent management of counterparty credit risk does not permit it. If we lose some, we have to create some new ones to take their place.

As I write, Irma's track is shifting one way and another, as is its prerogative - but Florida is definitely going to be hit hard.

This is what we are here for. This is what we have prepared for. Let's do the right thing by our customers and rise to the immediate challenge of tomorrow and the weeks and months ahead. Good luck.

To read the first of our Monte Carlo dailies for 2017, please click here .

Mark Geoghegan,
Managing Director,
Insider Publishing

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