In 1984 Hugh Cockerall, a professor in insurance studies at the City University Business School, in his much under-rated book Lloyd's of London - A Portrait wrote: 'one problem faced by all portrait painters is that the sitter will not keep still.'
Lloyd's, as a subject, was not keeping still then and is certainly not keeping still now. The two works just published do not have quite the impact of an instant book; yet neither effort possesses comprehensive and reliable information to provide cool analysis and historical perspective. Both look at Lloyd's largely from the viewpoint of the distressed underwriting members, those facing the largest losses.
Cathy Gunn, in Nightmare on Lime Street (Smith Gryphon pounds 15.99) is not so candid as Jonathan Mantle in naming her sources. Nor is her study so well organised, well written, or zealous. Indeed, by the time Mantle reaches the end of his thesis he has identified with the plight of the underwriting members to such an extent that he is providing help for various members' action groups, testifying before US Senate committees on their behalf, accompanying the odd member to a meeting with a Government minister, and passing pieces of correspondence to the press.
He concludes that Lloyd's is dead, while Ms Gunn believes that lessons have been learned.
Lloyd's has faced more serious crises than this. Long ago it collapsed completely, after becoming a gambling den, and was only revived by the efforts of underwriters with more probity than some of their peers. In the early part of this century it paid out huge claims on the San Francisco earthquake, yet survived.
As recently as 10 years ago the market was awash with real scandal when it emerged that underwriters had stolen money belonging to insurance syndicates formed of unsuspecting underwriting members. Lloyd's escaped only because it was making extensive profits, and because the underwriting members, who are now shouting from the rooftops about Lloyd's standards of behaviour, were too greedy to leave.
In the last two years Lloyd's has been making huge losses. Such is the scale of the deficit that the hardest hit members now regard the whole institution as awash with malpractice and irregularities. Some of the allegations, though wrong in detail, have some substance. But the jury is still out: the results of a range of inquiries are due in the coming weeks.
Such considerations do not bother either author. Each lovingly repeats what the members are telling each other at cocktail parties or relaying to their MPs. It makes for inconclusive reading, presented in a breathless episodic narrative style, with numerous factual errors.
Moreover, the partiality with which Mantle presents his subject does not make a good case for the prosecution. Some people whom he appears to have used, among his 86 acknowledged sources, have had controversial business careers outside and inside Lloyd's, often leading to extensive brushes with the authorities. These details seem to escape the author's notebook. Some others who have been quoted are, in this critic's opinion, simply unreliable.
Should we care whether up to 6,000 underwriting members, some of the most sophisticated and richest individuals in the country, now stand to lose everything because they made a mature decision to stake the entirety of their wealth on a share of possibly large profits? These two writers are very sympathetic. But their sympathy for the members prevents them from diagnosing the real problems at Lloyd's, which are deep-rooted indeed.Reuse content