On the Underwriting Galácticos

Bale & Ronaldo: Real Madrid's latest Galácticos but few remain in London's insurance market © Real Madrid
Bale & Ronaldo: Real Madrid’s latest Galácticos but few remain in London’s insurance market (www.realmadrid.com)

A term coined in Spain, Los Galácticos were the soccer superstars expensively acquired by Real Madrid following a policy at the time to construct a world-class team by bringing together the most talented, prestigious and marketable players on the planet. The glamour of signing Luis Figo, Zinedine Zidane and David Beckham and the spectacle they produced together on the field was fantastic but the club ultimately failed to build long-term sustainable success. Indeed, any whiff of a Galácticos policy these days is much derided; detractors point to the huge amount spent on prima donnas often incapable of fitting into the framework of an established side.

A far cry from all that glitters at the Bernabéu Stadium but there was a time when the London insurance market was also the home to a number of Galácticos. Much feted by brokers and their clients, a small group of colourful underwriters with flair and an eye for a deal once ruled the roost especially so in the Lloyd’s arena. Unfortunately only a handful of them survived the huge losses that emerged from the troubled 1980s and 1990s with reputations intact. Since then the reformed industry has cast a wary eye towards those risk takers who dare to be different. Few businesses now appear at ease nurturing individual brilliance in our monochrome world where conforming to models and rules is paramount.

A point demonstrated perhaps in this year’s ranking of the top 50 underwriters published by Gracechurch Consulting. The chart contains a talented, bright bunch for sure but as Gracechurch’s Ben Bolton intimated in a recent interview with Lloyd’s, “best practice today is all about teams not just the individuals” and these guys (they are nearly all men, still) are most definitely team players. That the top ten underwriting firms employ over two-thirds of the underwriters on the list also suggests that the days of the swashbuckling privateer are well and truly over.

The leaders of tomorrow who emerge from this group will have deftly climbed the corporate management ladder although less likely will they have been as inventive on the trading floor as the underwriting Galácticos of a past generation. Of course nobody would welcome a return to the excesses that accompanied all the creativity of back then. Yet those that run and govern today’s industry should consider whether they are cultivating an environment that is so undynamic now that gifted individuals have no space at all to flourish. If conformity is king then London may struggle to recapture the spirit of innovation widely viewed as the key to securing the market’s position on a global stage.


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