Column: Roger's Soapbox

The Non-Essentials

By: | February 18, 2014

Roger Crombie is a United Kingdom-based columnist for Risk & Insurance®. He can be reached at [email protected]

My brother has home contents insurance. He moved recently. To insure the contents at his new house, he had to cancel his existing policy and start a new one, even though he remained with the same company. It required a premium refund on the first policy, a new premium payment on the second and 90 minutes on the phone with a guy from the insurance company to make it happen.

Same contents, same values, same deductible. New address, one rural postal district away from another.

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Annual premium: about $220. Possibility of the company making a profit on this policy last year or this: nil.

I know: the underwriting, blah blah blah. But it’s no way to run an ant farm, is it?

My own home move last summer required me to tell the U.K. government, because I have a few of their bonds. I called the relevant number.

Oh no, a man said, I can’t take your address. You have to fill out a form.

Fine, I said.

To what address shall I send the form, the man asked.

So I gave him my new address; he wrote it on an envelope; then he forgot it.

A week later, I mailed in the form and hey presto! My bonds now know where I live.

I could cite 10,000 examples of such inefficiency. The above covers both the private and public sectors, which leaves only the third sector, charity, which employs mostly volunteers. They’re probably much more efficient.

This planet is stuffed to the gunwales with incompetent “jobsworths” — as in “It’s more than my job’s worth to help you out.”

None of these people are employable, in the sense that their employment might improve the profitability of their employer. But, if every job were held down by someone efficient, there’d be 90 percent unemployment worldwide, i.e., no system. Just violence and mayhem.

Well, more violence and mayhem.

When the U.S. government had to close some years ago because incompetent politicians couldn’t agree on a debt ceiling (much like last year), the call went out from Washington for all “non-essential” personnel to stay at home.

Now let me ask you this: How many non-essential personnel do you suppose John Charman employs at Endurance, or Ed Noonan at Validus?

The answer is somewhere between not many and none. The question is: Does this make Charman and Noonan antisocial? Would the world be better off if both men hired incompetents to set their enterprises back 50 years?

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This is why we so highly value well-run companies. By maximizing performance and return, executives at such companies do the world a favor.

Yes, they fail to employ the useless, but we have the postal service, politics and almost every other industry for that sort of thing. Unions exist almost solely these days to ensure jobs for the worthless. Noonan and Charman, by their very nature, are exceptions, and thank God for ’em.

Their example lights the way for others. Their example allows savvy investors to outperform markets composed of companies using non-essential employees. Their example affords hope, where none would otherwise exist.

(Magazine columnists, obviously, are essential smarty pants, or we wouldn’t be here, would we?)

Read more of the award-winning, irascible Mr. Crombie here.

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The R&I Editorial Team can be reached at [email protected]