Every Last Cent

27

REFLECTION TIME.

SOMEWHERE, it seems to me, I harbour a deep suspicion that God is having us on. Just look at the state mankind is in. It's not just our own messes – wars, pollution, famine –

it's everything God starts us off with. Like our shapes, for instance. Like having to gulp slices of dead plants and animals just to keep alive. Having to go to the loo is another winner. Could anything be more pointless? Or sleeping. Stop what we're doing, to lie flat and become unconscious for hours, just to do it all over again. Daft. I reckon God was a beginner. God wanted to create a brilliant computer but never read the manual.

He's as hopeless with animals. Think of parasites. For heaven's sake, whatever was God thinking of? Every spring I worry for the swallows. Poor little sods have to fly all the way up the entire world, hang about East Anglia for the summer, then migrate all the way back to South Africa and just make it in time to start back again. Where's the sense in that? For God's glory? I ask you. It's time God got his act together. Please, oh God, next time read the instructions on the box before reaching for the screwdriver.

Better still, leave us alone. We're thick, but we're not total duds like Somebody Up There I might mention.

Except for one thing.

Remember greed?

Once upon a time, back in darkest old London town, coffee houses flourished.

Everybody loved to forgather in smoky old seventeenth-century streets, Greenwich to Hampton Court, and swill the new tarry stuff. Coffee even had streets named after it. It was believed to be so-o-o healthy. In those dens you could meet gentry, famous society beaux, politicians up to no good, empire builders. You might chat to Dr Johnson, harken to admirals, notorious gamblers, saints and sinners all.

And businessmen.

Years passed. Coffee dives specialized. Some tended to cater for literary buffs, others for society. In cramped old Tower Street, one Edward Lloyd charged penny a swig for his brew. This wasn't all that cheap in those days, incidentally, when it took 240 pence (each penny worth four whole farthings!) to make one pound, coin of the realm. Lloyd kindly chucked in ink, quills, paper and free spills for you to light your churchwarden pipe as you sat by his fireplace and penned messages about your mercantile enterprises. At first, ladies frequented the coffee caffs but, as this place and then that place became teeming outhouses of London's free-wheeling markets, the ladies drifted to fashion-conscious emporiums to gossip over cakes and furbelows, leaving the men to deal.

London's insurance market was born.

Insurance wasn't new. Long before 1 AD, traders bargained on the shores of North Africa when insuring cargoes in Mediterranean galleys. But the sheer global range and intensity of London's maritime activity was beyond anyone's imagining. And nowhere was it more boisterous than in Edward Lloyd's little coffee pad. They called it assurance at first, then standards slid as the underwriters – who inked their names at the bottom (under-writing, see?) of agreements scribed in Lloyd's nook – started plain gambling.

Besides ships, they bet who would win wars, who might survive if the Black Death returned, who'd marry and when. You could drop in Lloyd's coffee shop and insure yourself against losing at cards or the chances of rain on your new daffodil. Anything, in fact.

Deceit flourished.

Something had to give. A cluster of sober merchants hived themselves off. Still identifying themselves by Edward Lloyd's moniker, they became, in effect, a dedicated insurance market, the great Lloyd's of London. Its humble messengers became magnates in their own right, flourishing by part-time spying for the Empire as Napoleon did his tyrannical stuff and navies fought and fleets foundered.

Through it all, Lloyd's loyally surged on.

There came a real test. It made Lloyd's name a byword.

It was horrendous, and it happened in the US of A. In 1906, San Francisco fell down. A terrible earthquake crumbled the place. People lost everything. When the dust cleared, they put in their claims. Insurance businesses everywhere wrang their hands in horror, for they'd go bust if they paid up on even a fraction for the poor San Franners. All over the globe insurance companies whined that they couldn't pay up on this claim or that claim because of the small print on their contracts .. .

Everywhere, insurers slipped away.

In the pit of despond, San Francisco stared poverty in the face. Ruined. Broke. It was the end.

Then, as the dust settled, there came a sterling one-liner across the Atlantic. In old London Town a gentleman quietly swilling his morning coffee at Lloyd's messaged a few calm words. One Cuthbert Heath, a Lloyd's man of the old style if ever there was one, sent a blunt instruction across the Atlantic on the fancy new electric telegraph to hirelings in the New World. It was world-shaking and utterly memorable. From his quiet little Lloyd's box, Mr Heath commanded his reps to pay every single cent claimed by the poor unfortunates in the Great 'Quake, -whatever the small print might say. You insured with him at Lloyd's, kind sir, you were insured. Bounders might wriggle out from under, but mighty Lloyd's stood by its word. And that, said Cuthbert Heath, asking to please pass the loaf sugar, was that.

You can imagine. Relief abounded in the Americas. The consequence? Whole empires, royalty, global conglomerates, flocked to insure with Lloyd's of London. If you weren't

'A-One at Lloyd's' you ought not to be allowed into any respectable club and be off, you scoundrel you. Commerce at last had a trusty standard. Films were made extolling Lloyd's admirable virtues. Its motto was, of course, Fidentia. That's what Lloyd's sold.

Confidence. If you were a Lloyd's man, you were a Name. 'Nuff said.

The only people allowed to become Names were gentlemen of standing. History records that you had to own the equivalent of a million in modern money. Actually it was much more, because so many of the UK population in those days lived from hand to mouth.

Then times changed. Over the years, the amount of handy cash you needed was less than a third of what you insured. It was still, however, a posh mob.

One thing didn't alter, though. If you became a Name and insured somebody, you were in for every last cent. Down to the gold in your teeth 'and your cufflinks', as everybody jokingly used to say.

Nobody jokes like that now, because of Hurricane Hugo.

Remember I mentioned how the Almighty sometimes gets things cockeyed? Well, sometimes he gets things even worse.

As the 1980s bumbled along, God decided to have a field day with Planet Earth. Maybe we were looking too complacent, whatever. Bored, God roughed the world up. He foundered a vast ocean oil tanker here, caused a horrendous oil-rig fire there, and set in train disasters to blacken every front page. One especially grim event was Hurricane Hugo. Then the San Francisco earthquake returned, did a grim lap of honour. Claims beginning as a trickle became a deluge. Thousands of millions – count the noughts –

were claimed, claimed, and claimed. The world wanted its insurance money.

No honourable telegraphed message this time. Why not? Was there a good – or maybe a bad – reason?

In the good old days when insurers stood by the words they uttered, you could become a Name by getting yourself put forward by someone as honourable and worthy as yourself, even. Should you be accepted, you were in. You dined there, and folk clapped politely as you entered a restaurant with the chairman, and respectfully stood as you took your seat. Your lady received precedence. It must have been marvellous, a world of honour cocooned in an honourable world.

It was all justified, in a curious way, for the Mother of Parliaments in London had, in its wisdom, decided that what was good for Lloyd's was good for the world. Mere mortals like you and me have to send in our income taxes on the dot every year, or we go to clink. Not so Lloyd's. 'Take an extra year, old chap,' said Chancellors of the Exchequer to Lloyd's. 'Better still, take two or three years, and how is Elsie's riding coming along?'

Lloyd's even got an extra extra perk. No kidding, they were exempt a little something called Law. Lloyd's got exemption from laws in every direction, sort of immunized by Lloyd's own parliamentary act. Cushty, as we ordinary fraudsters and conmen might enviously say out here. Cushty means money for the taking. It's how some define insurance. Not me.

In those halcyon days Lloyd's must have been heaven, a legal 'licence to print money', in the defunct jokey phrase. But some people in Lloyd's market were a new breed. They were sober professionals who'd salted away solid savings. Lloyd's had seven thousand at the start of the ipyos. In less than twenty years the 'names' almost quintupled. At first, all was rosy. Until Hugo, then Hurricane Betsy, then oil fields went wrong and ships glugged ... The worst calamity of all was yet to come.

Asbestos struck. Actually, asbestos was trouble even before the 1950s. It wasn't until the 1970s, though, that incipient panic began. New Lloyd's investors, however, thrilled to become part of mighty Lloyd's, rolled in, signing gleefully on dotted lines. Prestige counted. Then horrendously huge claims washed in over the transom. Investors realized what they'd signed into. Many – that's many, many – faced ruin and some went down the pan. Royalty, ex-prime ministers, nobles, millionaire bankers, international celebrities bulging with cunny money, who had all jubilantly marched along in the profit carnival, now stared aghast into their mirrors of a morning wondering how they'd manage their penny cup of coffee today. Or ever again.

Some began lawsuits – against Lloyd's, no less, telling how they'd been lured by extravagant promise. Dark allegations were made, of official reports swept under the carpet, of Lloyd's ducking and dodging behind barricades of paperwork erected by dozens of lawyers. As the Millennium homed in, newspapers everywhere carried different slants on wild stories of supposed whispers on Walton Heath golf links, of conversations punctuated with nods and winks on the private yachts of moguls. As Americans say, it hit the fan, because unlimited liability means just that. Some fought through the courts and got massive damages against Lloyd's agents. Others wearily submitted and trudged off to live in sheds on handouts.

The media howled, thundered, yelled about cover-ups. New recruits to Lloyd's, finding to their horror that, far from sitting back and raking in the gelt, their purses and wallets were being relentlessly prised open by ever-increasing claims, began to squeal as the pain started.

The media went ballistic and demanded answers. Exactly what did happen, folk howled, to the Cromer report of 1969? Exactly why did the Mother of Parliaments, that stickler for law, on the feast day of St Apollinaris quietly slip Lloyd's that oh-so-valuable exemption from being sued? And how come the Bank of England's own special executive, a gent of renown and probity, whom the Bank forced into Lloyd's in the 1980s, got spat out like a pip? And so on, with emotional overstatement blasting everyone for everything. Skullduggery was everywhere. And in Lloyd's.

Well, it would have been a mere storm in a teacup –okay, pedants, coffee cup – and we could have all got on with wondering about real life instead of the City's greed. Except that investors began to dive out of the windows, metaphorically and actually. Ask around, and everybody knows somebody who'd been touched by the calamity.

Everybody everywhere has a cousin who was a once-wealthy Lloyd's investor, or making a claim for some prolonged ailment, or who was once cheerful but now is haggardly asking questions about the losses at Lloyd's that soared from mere thousands to billions. Heaven alone knew how many lawsuits ticker-taped down onto underwriters, insurance brokers, even ordinary agents in small town offices, but it was plenty. The terrible word fraud – normally reserved for humbler folk like me – was actually spoken. Folk meant Lloyd's.

Deaths began. Newspapers headlined that the suicide toll was to be laid squarely at the financial calamity's door. Some said ten deaths, twenty, then thirty. The Serious Fraud Office, an outfit that does Sweet Fanny Adams, will of course get nowhere as it peeps timidly round those solid double doors. Like those intrepid parliamentary teams that started investigating with drumrolls and fanfares – then finished up harrumphing into their gin and tonics before strolling out to the next round of golf. And Lloyd's?

Shrinking, shrinking. Me, I worried about who was in for a penny or a pound. And who was in for every last cent. All very well to mull over commercial problems on some gigantic global scale, but not when you're worried about some lady you once painted.