Lloyd’s Market scandals: the reputational ripple effect that damages us all

“I don’t mind you losing me money occasionally, but never lose me my reputation.” Robert Hiscox to a fellow Hiscox executive

The Insurance Market is founded on co-dependency and nowhere is this more true than the London Market.

The shameful news last week about yet another scandal in the Lloyd’s Market went global, even cutting through headlines about a devastating war in Europe.

It cannot be underestimated how damaging this is to the London Market and specifically the Lloyd’s brand…and all who are part of it.

Insurindex has been set up to demonstrate the value of brands and to educate the Market about why brand is central to building trust – but also how quickly that value and trust can be trashed.

So, let’s not mince words, this scandal is about as serious as it gets reputation-wise.  And the ripple effect will cause collateral reputation damage to every London Insurer, no matter how hard they work or how committed they are to good business practices.

It will also undermine trust and damage the ability of the Market to sell a positive story to young talent – at a time when it is desperately needed.

Is a £1m fine enough to cover all that?

Unfortunately, too many London Market executives have simply not taken their culture and values or brands seriously, preferring to focus entirely on the profit motive (even when they weren’t making money) and hang everything else, including the reputation of the Market which gives them a living.

Acting in a ‘bubble’, where there are no reputational consequences for bad actions, is a tragic delusion and should now be called out wherever it is found.  Moreover, we believe the consequences should involve ejection or suspension from the Market rather than financial penalties; the insurance brand is too important to allow ‘brand terrorists’ to remain in situ with only a financial slap on the wrists.

Now more than ever we need to focus on the customer and make it a priority to work out what we can help them with and what they expect and want from us. This is the healthy way forward and Lloyd’s should consider this as a campaign.

Insurindex will showcase the brands that do lead – on all these fronts – and will highlight how they work to uphold values and build trust.  We will also call out bad practices – or misleading marketing – because we know just how dangerous and damaging that is to everyone who loves this Market.