The strong working relationship between brokers and underwriters is at the heart of the Lloyd’s insurance market with face-to-face communications still as important 330 years after the first risk was underwritten.

Richard Nemeth, a Director of Tysers Marine Division, and Tim Garrett, Head of Cargo and Specie at Beazley, have enjoyed a broker/underwriter relationship for nearly 20 years. Talking Tysers met Richard and Tim to gain their views on the broker/underwriter relationship and on the market.

TT: How did you get into the insurance business?

Tim Garrett (TG):

After completing my A Levels at school, the father of my girlfriend at the time was a hull underwriter and suggested I looked at a career in Lloyd’s.

Richard Nemeth (RN):

When I left school my father, very sensibly, said, “Get a job first, and maybe one that involves a bit of travel.”  As it happens, he knew someone who was looking for an office boy, and I went straight into working on a British shipping line’s fleet and marine is pretty much what I’ve done ever since.

TT: What do you think are the major developments that have taken place in the insurance industry since you’ve been involved?

TG: “Corporate capital has played a massive role in the Lloyd’s market in the last decade or so. It saved the market after the asbestos and environmental losses.  Also the complexity of IT and the reporting and monitoring that we can do now has changed the market enormously.”  

RN: A big increase in professionalism and expertise and the increased usage of data and actuarial studies.”  

TT: How do you see the market currently?

TG: “From a marine point of view the market is incredibly soft, and from an underwriting point of view quite ill-disciplined which I think is probably a detriment to a lot of our clients.”

RN: “We’re at the bottom of a market cycle, but I do see some signs of hardening.  I don’t think we’re ever going see a return to the traditional hard/soft market cycle that we saw in the early part of this century.”

TT:   What do you think the key attributes on which Lloyd’s and the London market participants is focused to ensure that London retains its global leadership?

TG: “Lloyd’s has been fantastic over the years in its ability to be entrepreneurial.  Its ability to react to different demands on insurance products, and that goes right across the market, not just within marine or cargo.  The cast iron guarantee backed by the Central Fund that a claim will be paid is as strong as ever.”

RN:   “I would say being nimble and alert.  Nimble in the way that the market deploys its expertise and intellectual and monetary capital to provide what clients want more quickly than anywhere else in the world

TT: What are the attributes that you look for in your cover holders and producers?

TG: “It’s the traditional attributes of integrity and honesty. We find that the best broker relationships are the ones who understand what the underwriter needs but also can articulate to us what their clients need.”

RN:   “The ideal producer is one who can get very close to the client’s decision-maker and also one who can add real value to the production process.”

TT: What is your current view on recent spate of large market losses, e.g. SpaceX, Stellar Daisy (a Korean bulk carrier sinking) and the recent spate of USA pharmaceutical losses?

TG: “With so many large losses out there the market isn’t really responding positively, probably due to the surplus of capital floating around. I think the way syndicates and companies write their business these days with such huge exposures and big percentage lines, you can have a relatively large loss that doesn’t impact that many markets individually.”

RN: “The cargo market in particular has suffered a sustained run of quite large losses.  I think it’s going to find it very difficult to absorb this level of loss in the context of a very competitive marketplace and very low premium rates.”

TT: What is your favourite place to travel to and why?

TG: “Probably somewhere like San Diego because the weather and the food are excellent, and we’ve got some really nice business there.”

RN: “I spent a very happy year living in the US and I’d like to do more business there, especially on the East Coast.”

TT:   What’s your favourite vineyard?

TG: “It would have to be Château Pichon-Longueville in Bordeaux.”

RN: “Pretty much anywhere in North Western Burgundy that makes Chablis “

TT: What is your favourite restaurant experience?

TG: “I would have to say Raymond Blanc’s Manoir de Quatre Saisons in Oxfordshire because that’s my wife’s favourite.”  

RN: “It has to be Sweetings here in the City.  Fantastic fish and great Chablis!”

TT: What do you most like about the business?

TG: “You never know what’s going to happen from day to day, in terms of business and people. The variety of what we see and get involved in on a Global basis is fascinating.”

RN: “The fact that we’re a face-to-face business gives us a real opportunity to develop strong and lasting business relationships.  Professional relationships will often develop into strong friendships as well.”

TT: What’s the most bizarre thing you’ve ever heard in Lloyd’s or the most unusual challenging risk you’ve written?

TG: “It was for a cargo risk of two small bottles of a chemical that came out of the pancreas of a crab that could only be bred off Eastern Russia. Supposedly the next miracle cure for life in general, vastly expensive. ”

RN: “I insured a hippopotamus going by air from a zoo in Chicago to Caracas in Venezuela.  We discovered that if she was hand-fed for a week seven days prior to the flight and accompanied by the feeder this would keep her calm.  And it did – she arrived safely.”

TT: What would you say has been the biggest or has had the biggest influence in your career?

TG: “I was lucky enough to spend the first 16 years of my career working with James Gaiger at Syndicate 483 and QBE who was a tremendous mentor to me, but I have also learned a lot from Steve Gargrave, at QBE and Creechurch, and Clive Washbourn, Head of Marine at Beazley.”

RN: “Working closely with two or three individuals who were fanatical about professionalism, attention to detail and quality of presentation.”

TT: If not employed in the insurance business what would you choose to be?

TG: “I would probably end up being an apple farmer in Northern France making Calvados.  I think that’s probably got my name all over it.”

RN: “I’d love to run an orchestra or a choir, especially for youngsters who wouldn’t otherwise have an exposure to music-making.”

TT: Tell me something that not many people know about you?

TG: “After winning the village show vegetable prize for three years running my wife and I got asked to be judges so that somebody else could win.”

RN: “I was a music scholar at school.  Singing, clarinet and saxophone, but it was taken away from me for spending too much time on the rugby field.”