At Awbury, some of us are of sufficient vintage to remember the original Walt Disney film of Kipling’s “The Jungle Book” and the song “Trust in Me…”. What you may well ask, do the machinations of a psychotic python have to do with the world of Awbury?
While it may seem trite, the song’s title raises a point which is, in fact, fundamental to commerce and (re)insurance- the importance of trust and co-operation.
One can debate whether competition and a laissez-faire approach to economic management are superior to alternative models in which there are mechanisms to curb the extreme and harmful outcomes that untrammeled and unregulated markets periodically impose on so-called market economies, and whether it is possible to design a perfect system of contractual obligations, such that businesses become able to run themselves without human intervention. However, in the real world, the proper and most effective conduct of business is based upon trust and the co-operation of all parties involved, not coercion or unbridled competition.
When I negotiate with you in good faith, I do so because I make the assumption, based upon experience, that, while we may have different needs, ultimately the best outcome for each of us is the one in which both parties believe that they have been treated fairly. We may be “competitors”, but a zero-sum approach to our negotiation is, in fact, a “mug’s game”.
While there has been little academic work published on co-operation in recent years, a paper entitled “The evolutionary advantage of cooperation” by Peters and Adamou, in which co-operation involves risk pooling and risk sharing, both classic concepts within (re)insurance, concluded that such co-operation benefits all participants in the long run- and one cannot have co-operation without trust!
Our clients and partners know that, at Awbury, a fundamental tenet of our approach to building and maintaining our business franchise is ensuring the alignment of interests of all the parties to a transaction, because this an important signaling mechanism that aims to ensure, to the extent possible, that the parties will behave rationally; and reduces the risk of a scenario in which one party believes it can act without consideration of the interests of the others, or without negative consequences for acting in bad faith.
Of course, we do not believe that competition per se is a bad thing, nor are we naïve enough to think that we live in a world in which everyone acts at all times with full ex ante consideration of the consequence of his or her actions on others. Self-interest is always a powerful motivator. However, as the classic Prisoner’s Dilemma amply demonstrates, acting purely selfishly and without trust in others tends to end badly for all concerned.
It is also worth bearing in mind that individuals or groups who are able to co-operate successfully tend to be more effective in competing against those who lack that ability, or who consider trust and co-operation a sign of weakness.
So, when we say that you should trust us, it is not an idle or deceptive statement. We are very serious. Trust and co-operation are effective ways in which to create value and better outcomes- for ourselves, our clients and our partners.
The Awbury Team