Purpose of Insurance

I’ve recently had to fight over a few months with the claims director of an insurer to pay a valid claim to my client. The quibble the claims director had was over procedural matters and there was absolutely no doubt that the defaulting borrower owed money. In fact, the borrower already issued an confirmation of debt.

So even though the claim director agreed to pay the claim, he wanted some additional documents executed.

In the end, we had to get my global head to talk to the head at the insurance company to resolve the issue but it’s too late. I received instruction from the client to use them less in future.

I thus wonder if it’s worth it from the insurer’s point of view? Now you’re going to pay the claim but your client has decided you’re a pain in the ass and does not wish to work with you in future. You’ve lost both the battle and the war.

I also wonder if insurers remember why insurance started is because people decided to pool together to share risks and with risk comes claims. As an underwriter, if you had a clean loss record doesn’t mean you’re a good underwriter at all. It just means you were useless in sharing risk. And I’m not saying this because I’m a broker. I started my insurance career as an underwriter albeit in life insurance.

A good underwriter prices the risk correctly such that the risk pool he underwrites contributes a fair premium into the total pool to fund claims.

Well, I suppose some lessons need to be learnt the hard way.

Hong Kong 5-7 June 2016 / GTR Conference

Reflections:
This is my second business trip to HK, which I always find ironic since it took 15 years of working life before work brought me to a country I enjoy visiting so much; and of which among my colleagues, I’m the only one who speaks Cantonese.

I know TST area better than I know Orchard Road. Which probably means that the rate of development in HK is slower than Singapore. I always find new things when I visit Orchard Rd say 4-5 times a year but I haven’t seen much changes in HK the last 5 years.

It was interesting during the Global Trade Review conference today when Singapore was brought up quite a few times as a comparison and highlighted as a competitor/threat to HK. (Comparisons were made in trade, corporate treasury and talent pool). I was reminded that there was a time when Singapore used to use HK as a benchmark in the finance sector but it’s been so long ago that I’ve forgotten about it. Singapore has really matured as a financial hub. It seems like we’re now benchmarking against the world while HK is benchmarking us.

A banker, who used to be my HK colleague’s boss in their previous company, commented to my colleague “how come my hair is so funky”. Indeed, work decorum in Singapore has changed a lot. I wouldn’t have dreamt of having purple and pink hair 15 years ago. In fact, people in banking would hardly have dyed their hair at all but no one cares now. We have come a long way in developing what’s our own acceptable norm.

I used to want to work in HK because I loved the vibrancy of the city. But its lights are dimmer now.