Risk taking: we all do it, but some of us are are more skilled at it than others. But what would you rather do? Drive in an F1 race, gamble at cards – or underwrite at Lloyd’s? By Lauren MacGillivray and Mark Glendenning

The Racing Driver


At any given moment there are only 20 Formula 1 drivers on the planet. And of those, even fewer are ever crowned world champion. Damon Hill belongs to that exclusive club after taking the title in 1996.

Famously described by his former boss Frank Williams as a “tough bastard”, the Briton won 22 races and make it to the podium 42 times during his eight-year career, including two second places in Monte Carlo – a circuit where his father Graham won five times.

Risk is something Damon Hill has lived and breathed, and something he had to overcome psychologically every time he got behind the wheel. “It’s pure guesswork,” he says. “It’s not a scientific study; it’s not like insurance. You do a reckoning of what the likelihood of getting hurt is.”

Obviously, it’s not a total gamble. Hill believes there are levels of risk, and that an F1 driver’s biggest concerns are for their own safety plus that of the other competitors. In contrast, the risk to your career is “not something that you spend a lot of time calculating, because the point is to push yourself to the maximum of your ability”, he says. “So in the process of driving, you’ll take calculated risks depending on other factors such as championship position.

“There is a marriage of your ability and getting the maximum out of yourself, and the ability to manage those risks that you feel are under your control,” he says.

There’s a limit to the number of times drivers are prepared to experience accidents and push their luck. Too many mistakes can wreak havoc on the psyche.

“It’s similar to gambling, except that there is a control factor,” Hill says. “F1 drivers feel they are in control, they trust their skills and they trust the capabilities of the team they’re with. But they have to factor in that there are going to be days where there’ll be something that they can’t account for.”

Hill understands mortality all too well. He was just 15 when his father died in a plane crash. Still, he’s never been afraid to push the limits. He believes there are risks in everything, and that, as human beings, we’re designed to take risks – especially when we’re young. There’s an evolutionary purpose to this, he says, so that we can find out about what the possibilities are.

But only a minority of us – regardless of age – have the guts to push ourselves to the brink.


The Poker Player


This English professional gambler used to rob safes in cahoots with shops that committed insurance fraud, and while he’s been straight for years, he admits to driving his Ferrari at “breakneck” speed.

But when it comes to calculating risk – something insurers do every day – he relates: “I’ve played in a game in Bobby’s Room, in the Bellagio in Vegas, where a guy lost a million dollars in 20 minutes. I also lost $350,000 in one hand about four years ago.”

At 55, Ulliott has a World Series of Poker bracelet and is now a regular on television. With his knuckleduster that reads “Devil” and “Fish”, along with his orange-tinted prescription sunglasses and leather jacket, he’s become one of the most recognised characters at the card table.

His winnings have trumped his losses after banking a cool $5.5m from tournaments. But getting there wasn’t easy. “Most players, like insurance people, are always messing around with other people’s money. It’s when it’s your own money that you’re taking a risk,” he says.

Growing up in Hull, Ulliott dropped out of school when he was 15. He got a job making trophies but was fired for skipping work to go to a horse race. With little direction and being natural street smart, it wasn’t long before he got into trouble. He was jailed twice – once for safe cracking and once for a fight outside a nightclub.

However, once he hit his 30s, he opened a legitimate pawnbroking business. He also began playing poker – a game his parents taught him at the dinner table – more seriously. At first he lost a lot. But eventually he was on such a streak that he had to travel all over the north of England and the Midlands to find willing opponents.

Many of those road games were private and Ulliott carried a gun for protection.“If you’re the big winner, you’re the one who’s likely to get robbed,” he says. “Somebody in the game rings his friends up, and they wait for you outside.”

Nowadays cash games are rarer – winnings are usually paid by cheque. Plus, gamblers can play in the safety of their own home. Ulliott, for instance, runs an online poker site, www.devilfish.com.

But he still finds ways to gamble. He had no home insurance when the 2007 floods hit. Luckily, his East Yorkshire property is on a hill and wasn’t damaged. He’s since bought cover. Ulliott says he never gets nervous playing cards.

Maybe that’s what he has most in common with insurers – if you know what you’re doing, risk can be calculated to the point where it’s controlled … at least to a point. “I’ve got a couple of beautiful houses, I’ve got a Ferrari and I travel around the world, so I must be doing something right.”

The Underwriter


When Peter Grove became a member of Lloyd’s and took on unlimited liability, he literally could have lost the shirt off his back. A terrifying thought at the time considering he had a wife, three young children and a mortgage.

The upside of unlimited liability was that he received a share of syndicate profits. But there was an obvious downside: “Whatever the loss those syndicates had, however great it was, I would’ve had to meet my share,” he says.

Fortunately there were no serious losses, and Grove, chief underwriting officer at QBE, can look back with fondly on that decade of experience from the mid-1980s to mid-90s.

Lloyd’s rules have since changed – wealthy individuals can still join with unlimited liability but most underwriters now join as part of a corporation. Of course, as an underwriter for the largest business within Lloyd’s, Grove still faces massive risk.

“The biggest risk I run is empowering people to take the risk. So the risk I run is poor judgment. I’m empowering others to underwrite on behalf of our business,” he says.

So far, he’s chosen wisely. He also remembers when others had to empower him, such as when he wrote his first catastrophe excessive loss risk for Brian F Caudle Syndicate 780 (now Advent). It was $25,000 for every loss. “That doesn’t sound like a lot but it was the very first risk I was offered when my boss was on holiday and I bravely wrote it … It worked out, I’m proud to say.”

He also learned some painful lessons during the London Market excess of loss (LMX) spiral that he witnessed first-hand in the 1980s. He realised it’s not enough to slough risk off to another party – you have to know the other party can meet its commitments.

“A lesson certainly was learned by the insurance market following the retrocessional spiral problems of the late 80s and early 90s,” he says. “That’s why insurers have been able to cope with the large frequency of natural and man-made catastrophes such as the sub-prime mortgage financial crisis and the Madoff investment fraud.”

Grove chuckles when asked how underwriters compare to racing drivers. “They risk their lives. I might take risks but I’d never risk my life.” But he gets more serious when asked about gamblers. “The gambler plays a game of chance in which luck plays a big part. An underwriter plays a game of rating where luck should not have anything to do with it.”

After working as an underwriter for the past 35 years, Grove is set to retire at the end of this year, when he will become a non-executive director of QBE European Operations. He plans on taking one major risk after leaving QBE – he’s promised his wife he’ll take up ballroom dancing. “But I think it will be more of a risk to her than to me.”