InsuranceByte with Prof. Pearson part 2

Prof. Pearson from Hull University, this week's guest on InsuranceBytes

Following on from last week’s InsuranceByte, I continue my discussions with Prof. Pearson on the history of insurance during the Industrial Revolution.

The interview was conducted in a busy London restaurant so please forgive the occasional background noise.

http://www.youtube.com/watch?v=o0MWC4rfSgs

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Podcast on personal liability

I was a guest again on the popular business show Dollars with Sense hosted by Dallas Booth. He asked me questions on liability insurance and the point I was attempting to get across is that at the end of the day we can all be held liable for our actions.

I hope you enjoy the segment. http://www.youtube.com/user/LMIGROUP?feature=watch

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Podcast on the early history of Insurance

Before heading over to London I sent off an email to Prof. Robin Pearson of Hull University and asked if we could meet. Prof. Pearson is the author of a book titled Insuring the Industrial Revolution. I had recently purchased this book for the LMI library and found it to be extremely interesting.

Prof. Pearson was about to go off on leave and it turned out that he and I would only be in the UK on the one day and he kindly agreed to catch the train down to  London from Yorkshire where he lives to meet and discuss his research.

I regard it as a privilege to meet people in our industry such as Robin who have such a great passion for general insurance and have generated so much knowledge and who are willing to share it with others. I asked Prof. Pearson if we could film part of our discussion for a InsuranceByte podcast and Robin was happy to oblige.

In fact Prof. Pearson was extremely generous with his time and we ended up filming 3 podcasts as he had so much to talk about. Before I bring you this, the first of those podcasts, I would like to thank Robin for being so generous with his time and knowledge. He even gave me another book for the library. 

Secondly, I would like to recommend the book if you are interested in gaining a better understanding of our industry. Prof. Pearson has really completed a very detailed study of the archives of nearly 50 English and Scottish insurance companies founded between 1696 and 1850 – virtually all the records currently available – along with many new datasets on output, performance and markets. As a result, the book presents one of the most comprehensive histories ever written of a financial service. You can obtain a copy at: http://www.ashgate.com/isbn/9780754633631

Finally, I would apologise for the background noise. We were not able to film this in our studio for obvious reasons and for convenience to Robin we met at the beautiful St. Pancras Hotel adjacent to St. Pancras Railway Station where Robin travelled into from Yorkshire.

To view the podcast click which I hope you find as interesting as I did please click here:

http://www.youtube.com/watch?v=P1Fst3WxM2c&feature=youtu.be

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Quick Follow up to recent Great Fire of London post

As promised in http://www.allanmanning.com/?p=3261 I post this photo of the Ye Olde Wine Bar, built in 1663, which is located at 6 Martin Lane, only a few hundred metres, literally a 4 minute walk, from the seat of where the Great Fire of London and yet it survived the fire despite it being constructed entirely of timber.

It is great to be in any building in London that survived this massive fire from 1666 and still stands and continues to trade to this day. They really are few and far between. If you get to London, it is well worth a visit to have a coffee or wine.

Get off at Monument Tube Station and walk to the west along Cannon Street and turn left into Martin Lane and it is on the left.

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Supply Chain Risk

I continue the RiskByte series of podcasts with insurance guru, Max Salveson. This week’s topic is Supply Chain Risk.  I chose this topic as it continually rates as the single most important risk for the majority of Risk Managers world-wide.

To view the podcast please go http://www.youtube.com/watch?v=dAkjiZ1YqTs

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Tales from the Tube # 1

During my trip to London I caught the tube from Farrington Tube Station which was the first of the Tube Stations to be built with the first trains running 150 years ago.

The Tube has played such an important role in the development of London and still plays a crucial part. While the Tube conjures up thoughts of the Blitz, the London Underground Bombings and so many other images, two things come to mind.

The one that I cover in this posting is that a case involving the Tube played an important part in expanding the underlying principle of utmost good faith that is inherent in all contracts of insurance.

Initially it was thought that this principle only applied at the time the insurance was taken out. It was extended to alteration of the risk mid-term by various judges in a series of cases.

Over time, this principle of acting with utmost good faith was extended so that not only does it apply at the time the insurance is taken out, but right through to claim time. In fact, based on a decision that arose from a claim that occurred during the construction of the Tube 101 years ago.

The case in question was British Westinghouse Co Ltd v Underground Electric Railways (1912) AC 673. Lord Haldane, the presiding judge, stated: “The duty of taking all reasonable steps to mitigate the loss and debars the claimant from claiming any part of the loss which is due to his neglect to take such steps”. What the judge went on to say was that: The duty to mitigate is not to ‘take any step which a reasonable and prudent man would not ordinarily take in the course of his business.’ Only reasonable steps.

Over time, this duty of mitigating the loss as part of the Insured’s duty to act with utmost good faith was again extended to the point where all questions asked of an Insured need to be answered honestly, and amounts claimed need to be as accurate as possible.

Of course the duty of utmost good faith is not a one way street. The duty, as Lord Mansfield said in one of the very first cases on the subject of utmost good faith, that of Carter v Boehm (1766) 97 ER 1162 that it applies to all parties to the contract of insurance.

What of course this shows is that insurance is involved in just so many facets of the economy. The presence of insurance which allows risk to be transferred away from the owners and or contractor to an insurer for a predetermined cost has allowed what would have been considered high risk ventures like the building of the tube to take place.

The importance of insurance and the underlying principle of utmost good faith are as important today as they were before the 150 year old tube had even been conceived.

Happy 150th birthday, Underground.

I will bring another tale next week.

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Wellington earthquake causes Continuity Plans to be Activated.

As reported in the media, Wellington was hit by a 6.5 magnitude earthquake on Sunday 21st July.

While I would not wish this on anyone, especially those living in New Zealand after the tragic Christchurch/Canterbury earthquakes it was pleasing to me to see just how many businesses activated their Business Continuity Management Plan that the business owners and or management team had developed on LMI’s www.ContinuityCoach.com.

I developed this in expensive on line continuity planning system in conjunction with a recognised world expert, John Worthington, a board member of the Business Continuity Institute.

For the record, one business had failed to pay their renewal subscription of $200 and contacted us by phone and we released the plan immediately trusting them to do the right thing and pay the NZ$200 fee when their crisis was over. We did this realising that having immediate access to company records and an action plan for recovery is of vital importance.

As we keep the cost of the plans so “skinny” and there is an on-going cost to store the plans and provide regular business contiuity exercises to test the plans we cannot allow this to occur in the future.

On a positive side the feedback we have had from users of the service is that having the plan has been of great comfort but more importantly reduced the period the business has been disrupted.

To learn more, please visit www.continuitycoach.com or contact me via the contact button above.

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Well done ASIC, again!

When it comes to insurance, advice is much more important that price!

Just under a month ago I congratulated ASIC for taking some of the Funeral Insurance carriers to task on their advertisements. [http://www.allanmanning.com/?p=3172]

I would like to congratulate them again on their warnings on Woolworths advertisements on car insurance.

Having handled claims for over 40 years, I share ASIC’s view that insurance is a lot more than price. It is about the coverage provided, the claims service and the financial strength rating of the insurer. Price, when it comes to claims time, is forgotten.

In a recent post, I analysed the coverage afforded by both Coles and Woolworths when it came to flood in their home policies and found the cover to be questionable. See When is flood insurance not flood insurance? [http://www.allanmanning.com/?p=3104]

It is the same with the motor policies. Things like CTP Gap Cover are not included in some policies and most Insured’s would not understand the ramifications of this. That is why, I use an insurance broker and check the covers carefully.

As I have repeatedly stated in previous postings, if you are in doubt about your own personal or business insurance please follow my example and contact an insurance broker and get the right advice. It is too late after a loss has occurred!

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Claims Preparation for Wellington Earthquake

As an ancillary to my posting on the activation of so many business continuity plans following the Wellington Earthquake, the ancillary has been that LMI Claims Services have been approached to assist with several claims. Our experience in handling earthquake claims in Christchurch, Japan and Newcastle has certainly provided a good grounding for our team.

If you or any of your clients requires assistance in preparing their claim please contact me via email at allan.manning@lmigroup.com and I will arrange for one of our senior team on the ground to contact you. I am scheduled to go there myself on August 6.

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Lloyd’s building close to being sold

While many people think that Lloyd’s is an insurer it is in fact a market place where insurance is arranged. This practice started in Edward Lloyd’s coffee shop in around 1688 and it is from his name that the Lloyd’s market draws its name.

While here in London I learnt that the current building in Lime Street London is reportedly being sold by Commerz Real AG-managed fund to a Chinese insurer for £260 million  (US$388 million).

While the approval for the sale has not gone through, it does show the power of the Chinese insurance industry.

With long term leases and naming rights in place it is expected nothing will change at Lloyd’s other than having a new landlord.

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