Rtn Keith Otter: Choosing an insurance broker

For our first meeting of 2024 we were back at the Chelmsford Rugby Club. Our speaker was member Keith Otter, who made it clear at the start that he was not going to tell us “How to choose an insurance broker” but would talk about “Choosing an insurance broker” and that he would tell us what happened when his old firm chose a broker for a very specific purpose in the late 1980s

He was a principal manager with the international accountancy firm Coopers & Lybrand. Principal manager was a good position to hold because within the firm itself principal managers enjoyed the same status as the partners. Keith’s role was a Head of the Technical Department for the firm’s Insolvency Division, which traded under the separate name Cork Gully.

There were special insurance schemes for insolvency practitioners. These did not insure the practitioners themselves but covered the insurable risks of the companies they were appointed to take control of. Cork Gully had designed the first of those schemes in conjunction with its own brokers.

In the late 1980s the firm decided to review the insurance arrangements for its insolvency practice. Keith was asked to oversee the process for selecting a firm of insurance brokers for the future. A selection panel was formed and the four brokers who had expressed an interest invited to submit proposals.

The day before the deadline for the submission of proposals, Keith was phoned by the newly-appointed Managing Director of the one of the four brokers which did not already have a scheme of its own. The MD wanted to deliver the proposal in person. Keith agreed and the MD and the director Keith had been dealing with up until then duly turned up the following day with their firm’s proposal. They asked him to read the proposal while they were there. Keith was reluctant to do this but they were very insistent. It soon became obvious that the MD wanted to watch his reaction as he read the proposal for the first time. He tried to hide the fact that he was definitely not impressed but did have to comment on one diagram which he could not interpret. Even after he was told what it was supposed to show he still found it difficult to work it out!

The selection panel rejected that proposal out of hand. The three remaining brokers were invited in to give presentations.

Only one presentation was memorable. That was for all the wrong reasons as it soon became obvious that that broker’s MD was going to do all the talking and answer all the questions and not allow the remaining members of his firm’s team to say anything. Even when Keith put a question directly to one of other team members, whom he knew well, it was immediately deflected on to the MD.

It did not take long for the selection panel to decide it did not wish to deal with that firm of brokers. It took much longer to decide between the remaining two but a decision was eventually made and the firm was still dealing with the winning brokers when Keith retired many years later.