Our man on the inside ponders a change in career and a capital-obsessed one-eyed monster
Top marks all round
The past few weeks have seen the tale of the two Wazzas taking centre stage – or not, as the case may be. The first was Wayne Rooney in the World Cup, but let’s not remind ourselves about that. The second was my old buddy Warren Buffett, taking part in a hearing in the USA scrutinising the role of rating agencies. Now there’s a racket I would like a little piece of, that’s for sure. To my mind, the game goes something like this. You set up your own analyst company, tell insurers they’re great and give them a certain grade, and a pretty good one if you’ve got your head screwed on. Then, they pay you for the privilege of doing it on a quarterly basis and Bob’s your uncle, everyone’s happy. Simple, innit? Boy, I’d be dishing out the A-grades like a maths teacher with an apple in his pocket. Only one problem, though – when it comes to marking the advanced algebra, I hear it all gets a little bit trickier.
Talking of school, I’m offering odds of 100,000-1 for a class of 2010 to emerge and 200,000-1 for 2011. I know, I know, the Bermudian premier Ewart Brown is looking at protectionist tax measures, and I think we’re all agreed that US companies in particular should not be subjected to that. But my gut feeling is that he’ll be leaving before that one kicks off, and there also needs to be just a little bit more consolidation in the market before new capital, start-ups and personalities emerge with the firepower to make waves. Oh, and the market is so soft it reminds me of when I used to sell foam on a south London market stall. So it’s not going to happen. Trust me on this one.
There I was, sat at the airport lounge with my pal on the way back from Johannesburg, musing over the disappointment of England’s World Cup exit, and my mind got to wondering: Ceiops, what the hell is that organisation all about? For those of you who don’t know, it’s the Committee of European Insurance and Occupational Pensions Supervisors. Not sure about you, but I want to change a couple of letters in there somewhere, and call it Cyclops. I just reckon that a mythical Greek giant with a single eye in its forehead is a much better acronym for what’s driving the beast that is Solvency II, the single most complicated and aggressive piece of regulatory legislation in a generation. That idle thought eased the pain of defeat for me … well for at least a millisecond.
They think it’s oil over
So president Obama is on the rampage over the BP oil disaster, but the chief executive in the frame is still in his seat and keeping a typically British stiff upper lip. I tell you what, though. I would need a stiff drink if I was sitting on a $20bn bill to cover the losses from this unprecedented disaster and had the top man in Washington, DC on my case. Meanwhile, BP also has green groups, animal rights protestors and fed-up surfers to contend with, and the damn thing is still leaking, with the hurricane season upon us and set to make things even worse. The boys in Lloyd’s are meanwhile watching closely, predicting that the price of insuring offshore drilling is set to rise astronomically and a legal turf war set to erupt. My advice for the Brit in the frame? Run for the hills, and then close your eyes and pretend it never happened. It always works for me …
And so to New York, where my pals on GR joined the nice folks at Willis for a roundtable on private equity. Special guest Don Kramer was in fine fettle, I’m told, entertaining the crowd with tales of his long and colourful career. He reserved some special venom for the rating agencies, though – and when it came to investors on the board, he had this to say: “I don’t call them my board of directors: I call them my board of intruders.” If only there were more like Don …?GR