13 Ways of Looking at (Re)Insurance…

The title is a tongue-in-cheek homage to Jane Smiley’s excellent book analyzing the origins, history, structure and impact of the novel, “Thirteen Ways of Looking at the Novel”- a literary form which is now so embedded in our culture that very few give much thought to anything other the content of the particular book they are reading.

In a similar way, the business of re(insurance), because it is simply “there” and generally works very well in meeting its primary goal of honouring valid claims, tends to be seen as rather mundane.

So, we thought we would enliven matters a little by using Smiley’s clock analogy (see p 179 of her book) to view (re)insurance through different lenses by employing some of her categories, and adding some of our own:

  • History: Insurance as a construct, even if it was not called that, has a history going back thousands of years, to the Babylonian era pre 2000BC; while the first recorded stand-alone insurance contract was written in Genoa in 1347
  • Tale: Think of the classic film noirDouble Indemnity”, based upon James Cain’s 1943 novel of the same name. It was all about the insurance
  • Joke/Humour: We’re not sure that (re)insurance has a humorous side. It is a very serious business. However… How many actuaries does it take to change a lightbulb? Well, how many did it take last year?
  • Gossip: In its original form, Lloyd’s Coffee House would have been rife with gossip. One might almost say that the London Market was founded upon it; but, of course, rapidly evolved to insist upon “utmost good faith” and ”my word is my bond”
  • Diary/Letter: The bane of any compliance department is the manuscripted policy, whose creator has failed to enter its full terms into the system
  • Confession: Do depositions count?
  • Travel: Just think of the opportunity to be an underwriter in Bermuda
  • Polemic: We all know that those 1/1 renewals can become a little fraught
  • Essay: For those studying for a degree in insurance and risk management, a form of mental cruelty, but “character-building”
  • Epic: Just think of Jarndyce vs. Jarndyce in Charles Dicken’s novel “Bleak House”. Someone should have bought a litigation cover
  • Dynamic: The industry  prospers on being able to respond to fresh challenges and adapting to provide new products and seek new forms of capital. Those systems which do not adapt, cease to have a purpose
  • Balanced: That Combined Ratio could go either side of 100%. Almost a random walk
  • Composition: The industry is going the way of so many others- scale versus specialization. The formerly great middle continues to be hollowed out.

We trust that our readers will forgive us for being a little “unserious”!

And may we take this opportunity to wish all our partners, advisers, and clients good fortune in 2020.

The Awbury Team

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