Ian Posgate
Buccaneering underwriter who made a fortune as the ‘Goldfinger’ of the Lloyd’s insurance market
IAN POSGATE, who has died aged 85, was the piratical “Goldfinger” of the Lloyd’s of London insurance market, wielding power over a large portion of its underwriting business in a freewheeling style that eventually caused him to be banned – though he was acquitted of criminal charges.
Posgate made his name and fortune as London’s boldest underwriter of war risks, with a profitable sideline in kidnap cover. “We made masses,” he told one interviewer, going on to explain that underwriting was not for him a matter of scientific risk analysis, but closer to bookmaking: “If claims came in, the premium went up. No claims, the premium went down.”
In the Vietnam War, by his own account, he covered “all the shipping in the Mekong at five per cent of the cargo value per month. That’s a huge premium. Suddenly some claims came in, so I put it up to 10 per cent a month and they still paid. Then the claims stopped, so we put it down again.” Every year the pattern was repeated, and eventually it was explained: “In the rainy season, the Mekong’s three miles wide, the shipping’s perfectly safe out in the middle. But in the dry season there’s only about 30 metres of water and the Vietcong could practically put their bazookas through the portholes. We made £20 or £30million out of it, but we never knew why until afterwards.”
The other key to his success, he said, was to “keep ’em coming”. He took on business at a furious pace, often accepting 50 per cent or more of risks of which others would take only thin slices; and he cut his rates to amass lucrative underwritings for his syndicates of Names (wealthy individuals who accepted unlimited liability in return for rich streams of premium income) rather than allowing good deals to be spread across the market to subsidise the less good.
Posgate was often accused of mischief by his rivals, but was by no means the only buccaneer in the Lloyd’s “Room”. This was an era when bad habits were so widespread that, as the accountant Ian Hay Davison famously remarked after being sent in as the market’s chief executive, “it wasn’t just a matter of a few rotten apples … the whole barrel was tainted.” Top underwriters – Posgate alongside members of Lloyd’s ruling committee – habitually steered some of their best business into “baby syndicates” populated only by favoured insiders, securing spectacular returns that were not on offer to external Names.
But Posgate was no hypocrite: while other leading lights boasted of Lloyd’s tradition of “ultimate good faith” and its eagerness for transparency and reform, Posgate’s much quoted motto was “in business I believe in dog-eatdog”.
As his star blazed, Names joined his syndicates in such numbers that he was eventually writing business for a quarter of the market’s membership, and reputedly accounting for 10 per cent of its underwriting capacity. But Posgate refused to be part of what he regarded as the Lloyd’s “club” and had no time for its established pecking orders. He could be cruelly funny or personally generous according to mood; brokers waited nervously at his box in the Room for short, sharp interviews before he stamped their “slips” to confirm his commitments. Though his manner of business was mercurial, his memory for the detail of every underwriting was photographic.
He was regularly in trouble for writing business in excess of his limits and other breaches of rules. After an episode in 1970, the committee of Lloyd’s decided he could no longer act as an agent on behalf of Names, and instead it was arranged that he should exercise his underwriting talents under the wing of Alexander Howden, an established Lloyd’s broking firm and managing agent led by Kenneth Grob – known as “the Grobfather” and himself one of the market’s most powerful operators.
Eventually Posgate was also allowed to establish his own agency, Posgate and Denby, where he ran syndicates in parallel with his role as Howden’s underwriter. Though he continued to cross swords with some market grandees – notably (Sir) Peter Green, a Lloyd’s chairman who was himself later caught in scandal – his reach was such that at one stage more than half the members of the Lloyd’s committee were members of Posgate syndicates, and he was himself elected to the committee in 1981.
In that year, however, Howden was acquired for a rich price by the American insurance giant Alexander & Alexander, whose accountants soon discovered that $55 million appeared to have gone missing, some of it allegedly into Liechtenstein trusts controlled by Grob, Posgate and other Howden directors. Posgate was cleared by a disciplinary committee of misappropriating funds, but found to have received valuable paintings – including Pissarro’s Route du forde de l’hermitage, which he described as “not that good”– apparently as reward for steering his syndicates’ reinsurance business through Howden’s broking arm.
The disciplinary committee recommended that Posgate should be banned from underwriting for life, but an appeals tribunal in 1985 commuted the ban to a six-month suspension. When he sought to return to work, however, he found himself declared “not fit and proper”. Then, after four more years of investigation, came criminal charges of conspiracy and fraud against Posgate, Grob and others.
The 15-month trial at Southwark Crown Court required a jury to grapple with matters of the most obscure financial complexity. Convinced that his market enemies had pushed the case against him, Posgate maintained his sangfroid and his box at Goodwood racecourse throughout, but put his chances of staying out of prison at no better than 50-50.
When he was finally acquitted (as was Grob), Posgate declared himself vindicated, but did not try to re-enter Lloyd’s as an underwriter: “It’s such an uninteresting place nowadays.” He did, however, win a battle to be allowed to remain as a Name – and despite hefty personal losses in the early 1990s, he remained so until the end of his life.
Ian Richard Posgate was born in Oxfordshire on March 31 1932. His father had a leather goods business, his paternal grandfather having dealt in rabbit skins; his mother’s father was a railway porter.
Ian was educated at Merchant Taylors’ School – where he played First XV rugby at wing forward – and went up to Cambridge to read Mathematics but did not stay the course. Having also abandoned the idea of qualifying as an actuary, he found work in Lloyd’s in 1954 as a trainee underwriter on the syndicate of an underwriter called Frank Davey, who arrived daily at 10.15am, left at 4.30pm and kept copies of The Field on his box. The business was small but Posgate soon began to build up his following of Names, having become one himself in 1957.
Ian Posgate devoted much of his time in later years to his country home and cattle farming enterprise near Henley. He was a devout Roman Catholic who quietly provided assistance to the diocese of Westminster when it was in financial difficulties.
He married Margaret Scott in 1956; they had a son and three daughters. The marriage was dissolved and he married secondly, in 1990, Sally Hunter, who survives him with the children of the first marriage.
Ian Posgate, born March 31 1932, died July 7 2017