Before rock survivor Ozzy Osbourne was fully rehabilitated and had his star re-cast via reality TV – that is to say at the end of the decade he had spent as a genuine has-been – he featured in a low-budget UK documentary looking at his extraordinary career.
Sitting drinking tea and chain-smoking in the unglamorous and unremarkable kitchen of a nondescript English suburban house, his laconic Brummie drawl served up some very wise advice to anyone contemplating embarking on a career in the music business:
“Be nice to people on the way up, because you get to meet them all again on the way down.”
Now might be a good time to remind insurance and reinsurance folks of the wisdom of that maxim.
Consider the broker forced to learn the art of diplomacy and genuine intermediation as the realisation suddenly dawns that not all deals simply place themselves, and that there are indeed more pressing problems than breaking the news to an underwriter that they are to be signed down.
And the underperforming insurer who can no longer rely on overcapacity to save the day and must now list remedial actions it is planning on taking to its portfolio before reinsurers will talk about renewing.
Or the reinsurer back out in the retro market for the first time in a few years, finding that many peers have had the same idea and there seem to be more prospective buyers than sellers.
And then there is the CEO suddenly facing up to severe shareholder criticism of his pay package at the AGM after decades of benign indifference.
You get the picture, but the list goes on. In a cyclical industry, everything is cyclical – not just pricing. The boot slips imperceptibly at first, but suddenly there comes a point when it clears the final resistance of the heel and falls heavily onto the floor. Suddenly it is replaced, but this time we find it is firmly on the other foot.
The soft and newly unshod trotter may be in for a rude awakening as the road ahead could be long and hard.
Yet you don’t have to be forced to learn the hard way. There is always an element of justice in play.
It should be no surprise that cedants that treat their reinsurers well when times are good tend not to be punished so much when times are harder.
Similarly, brokers that showed humility and took time to cultivate relationships with underwriters when market conditions meant they didn’t have to will be moved to the front of the queue now that the going isn’t quite so easy.
Now is not yet a time of major reckonings, but here and there one can hear the muted crunch of very small scores being settled.
As a many-times rider of the rollercoaster, Ozzy would be familiar with the slightly queasy feeling that occurs when the vertiginous ascent peaks and, instead of looking at the sky, the passenger’s horizon suddenly levels out.
Participants will soon know what sort of descent they are in for.
It may be smooth or it might be spectacular, but one thing we do know is that our market is rarely in equilibrium – someone always has the upper hand.
It is never too late for those in the ascendancy to heed Ozzy's advice. In a cyclical market, being nice when you don’t have to is always the best long-term business strategy.