Wednesday, June 15, 2005

Lloyds of London

Last week I flew to London on a Tuesday night, arrived Wednesday morning around 7.a.m., met with Lloyds insurance people all day, had a festive dinner by the Thames, slept a couple hours, did an early-morning meeting Thursday, and flew home. I thought I was doing pretty well, but reading them over now, my class notes from last Friday morning suck. When I get tired, I start drawing little pictures in the margins of my notebook instead of listening to what people are saying.

Hey, its not that I'm not trying. I'm pretty sure that I was the only business executive on the red-eye to London huddled under my reading light practicing MBE multiple choice questions, stuff like, 'Is it the "Privileges and Immunities" Clause or the "Dormant Commerce" Clause that provides a Constitutional basis to invalidate state laws the unduly burden out-of-state companies?' (by the way, if you know the answer please feel free to comment -- I still haven't looked that one up).

Visiting Lloyds was really great -- kind of a vacation from my vacation from my business. As I mentioned before, my company is spending lots more money every month than it is bringing in, but that is completely to be expected for a less-than-two-year old company that is developing and marketing a brand-new, novel product. The product is a new kind of technology insurance that I dreamed up. Because I had no background whatsoever in insurance, I thought starting a new company to develop and market the product would not be too difficult. oops.

This demonstrates Buy-the-Bar's First Law: What people in areas of expertise about which we know nothing do for a living, always appears to be MUCH EASIER than our own job. How hard can it be to re-attach severed fingers anyway? They give you a really good microscope and a very strong thread. . . You see what I mean. . .

Anyway, I did not know that launching a completely new insurance product from a startup is understood by insurance experts to be impossible even for experienced insurance executives who have years of personal capital to draw upon. But I was correct in my knowledge that Lloyds of London is the place where really difficult insurance problems get solved. If you want to insure against someone claiming your $10 million prize for the a successful private venture into space, or insure your Olympic television coverage in Athens against terrorist disruption, the only place that can get it done is Lloyds. They know risk. So I've been wanting to go in person for a long time, but at the same time putting it off until I was sure I knew enough to know what I was talking about.

And it was great. All the people I met with understood the role of the new product, showed genuine enthusiasm for the business opportunity (they could hardly have ALL been just being polite -- we know how hopeless Brits are at faking enthusiasm) and had practical help to offer. The Lloyds headquarters itself is one of the more beautiful modern buildings I've seen -- it somehow captures the tight-knit community guild feeling -- there are still wooden "boxes" where the underwriters sit and can be approached in person just like in the Loyds of two hundred years ago -- and the metallic, gleaming energy of a high-tech factory floor. (I especially liked the transparent escalators where you can see all the inner workings of the mechanism turning). I like Lloyds alot. I like startups because they take me into unfamiliar worlds -- like Lloyds -- as a participant not a tourist. Its one of those "worthwhile aspects" I was talking about.


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