How much work does Financial Services still have to do?


Directions

It is a serious question! It genuinely bothers me that FS is rated as less trusted than banking [Edelman Trust Barometer] for the third straight year.

Equally I am incredulous that the UK insurance industry has the audacity to, still, be talking about increasing “professionalism” when the Aldermanbury Declaration is nothing more than yet another attempt at (well-practised) misdirection…or, if you like, ‘turd-polishing’.

Don’t try to see into the future using the past as your lens!

You are looking in the wrong direction. By all means know about and learn from the past but don’t use the wrong lens to try to look too far ahead. As a concerned mother of my parents’ generation would say “you’ll just strain your eyes”! Look within: not necessarily in some mystical or philosophical sense – although there are numerous historical references that still hold good – but in a practical manner as far as the structure, culture and operation of the business is concerned. And in a metaphorical sense in respect of your own biological system. Read more of this post

CII Thinkpiece on networking:: the smell of bs in the morning…no thanks!


imageI’ve been in this business for a long time and, despite there being plenty of people able to bear witness to the fact that I’m a pretty “social animal” the truth is I have always despised networking! I cringe at the type of gathering that has, otherwise typically reserved Brits, feign joy because somebody who sells printing or dry cleaning services has just done some business with the person who sells life assurance or will writing. It’s all…well, how can I say this, FALSE! There is never the enthusiastic whooping and hollering of a Jerry Springer show and I’m sure an awful lot of that is down to the simple fact that most people are there under duress. Their boss or their sales figures sent or led them there out of desperation and the first measure of their success is how many business cards (even compliment slips) they offloaded or collected!

Nor am I keen on engaging with people purely on the basis that there might be some business in it. Exchanging pleasantries and small talk over a glass of wine and canapés whilst trying to ingratiate ourselves to each other would give anyone indigestion.      

If these are the basic ingredients for forming worthwhile, longstanding, business relationships then, to me (because this is only my opinion) the business world (particularly in Financial Services) IS as shallow and undeserving of trust as it has consistently shown itself to be in recent years. The thing about it is that, ALL the people who recognise these scenarios from their own past experiences are both vendors and buyers of a range of different products and services! So, we know bs when we smell it in the room or on our new best friend’s breath. Often it is the smell of fear or business-sponsored insincerity worn like an ill-fitting suit!!!    

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Insurance:: “Future risk” and technology [CII report]


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image30 yeas ago (and for much of the intervening period!) I never thought I would utter the words, “what a great report from CII” but there you are, I’ve done it now. I’m the “sad” insurance man I never wanted to be.

Well, not quite, because I am very much an outsider as far as the insurance industry stands right now. The main reason being that too many people on the inside don’t want to hear, like or understand what I have to say about the massive problems that the industry is adding to day, after day, after…

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Roads to Ruin: major corporate failures beyond the scope of risk management


I confess that I haven’t read the full report (it runs to 200 pages) but, between the report itself (link below) and the CII summary document, the message sounds eerily familiar to the voices that have been going round in my head for the last few years!!! Don’t be afraid I am not a threat!

buiding-collapseMuch of what the voices were telling me resulted from extensive research into the nature of complex systems that was prompted by the “genius” of Dr Jacek Marczyk (Founder & CTO at Ontonix). Much of what I have learnt and sought to bring to the attention of those engaged with mitigating and managing risk in insurance (and wider Financial Services) has, unsurprisingly, found its way into the pages of this very blog, numerous Linkedin Group and “real world” discussions.

Whilst my “journey” has been intellectually rewarding the same cannot be said in financial terms!

My experience is such that I don’t expect that there will be rapid and sweeping change as a result of this report. Although, bearing in mind the nature of the risk management “weaknesses” and given what we know about the societal cost of major Corporate failure, it would be perfectly reasonable to ask: why not?

It isn’t as if there haven’t been warnings. This is an extract from a report into systemic risk, prepared during 2006:

Two particularly illuminating questions about priorities in risk management emerge from the report. First, how much money is spent on studying systemic risk as compared with that spent on conventional risk management in individual firms? Second, how expensive is a systemic-risk event to a national or global economy (examples being the stock market crash of 1987, or the turmoil of 1998 associated with the Russian loan default, and the subsequent collapse of the hedge fund Long-Term Capital Management)? The answer to the first question is “comparatively very little”; to the second, “hugely expensive”.

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