Caught in the safety net
There may be trouble ahead . . . if there is one thing capitalism can be relied upon to do it is to create the circumstances in which the need to have one kind of insurance or another is virtually essential. Robbery, burglary, car theft . . . the list is endless
Curiously, the day the news broke there was a rare feeling of fellowship buzzing round the office. The official statement came through the internal e-mail system, though some heard it first on the early morning news. Groups of us talked about the future, looked eagerly out of the window at the cameramen and, later, crowded round the first edition of the evening ‘paper with its ominous headline. On the day we heard five thousand of us would lose our jobs we felt strangely excited.
Sun Alliance and Royal Insurance announced their proposed merger on 3 May. Within two years this will create Britain’s largest general insurer, with world-wide premiums of £9,386 million, assets of £55,051 million and pre-tax profits of £1,026 million (based on 1995 figures). Both companies will save an estimated £175 million by 1998, at a cost of 4,000 jobs in the UK and another 1,000 world-wide.
The history of insurance is crisscrossed with company mergers and takeovers, more so than other professions because each insurer is run using very similar methods to chase after the same portions of a particular market
Moulded by markets
A combination of market forces, legislation and changes in social responsibility has defined the rule of insurance within capitalism. In Britain, most of us have some involvement with it through household cover, life assurance or motor policies (compulsory since 1930). As a worker or even a customer in a shop we are likely to be covered by an insurance policy. Indeed, the different status of workers, customers and owners in relation to companies is reinforced by the way policies classify people. If you suffer an injury at work you will be ensured compensation through an Employers’ Liability policy. Your legal position in either circumstance depends on your relationship to the owner of the property where the accident occurred. As this type of insurance has contributed to the development of worker and consumer rights, it also represents how the working class is financially dependent on company owners.
Because it relies so heavily on the fortunes of other businesses for its income, the insurance profession is a useful barometer of the state of the economy on the whole. Insurers have only recently recovered their losses caused by the 1987 hurricane and the heaviest years of the recession. Since then, the cautious mood of the ’90s’ business activities has predictably lead to rationalisation.
Insurers will reduce staff numbers sooner than increase them and policies will only be issued if they are expected to be directly profitable. Even those committed to the system are realising insurance has moved away from pretending to be a public service towards a more openly cut-throat side of capitalism. In its place in Socialism, the emergency services would have to be expanded or another organisation created to deal with the longterm effects of accidents or natural disasters. But the whole range of insurances which deal with the flow of money and owner/worker/customer relations — theft cover, liability cover, health insurance, car insurance, life assurance — would become irrelevant and left for the history’ books. Current policies exclude any change in the insured’s circumstances in the event of major social changes, including revolution. Those who devise the policy wordings have realised the concept of insurance is only tied up with the current system and not a permanent way of dealing with property, even if this isn’t the image they publicise.
International capital
Large companies need a rigid structure to function, aimed at encouraging maximum efficiency with the minimum of costs. Each of the major insurers are organised in similar ways. Most have stakes in several countries, and usually continents. In each country a head office will decide company strategy and oversee the running of several regional offices. The bulk of the company’s income (excluding that made from company-owned shares or interest on loans) will come from policies underwritten here, often through intermediaries of varying sizes. There may also be smaller offices acting as sales outlets. Behind the scenes will be the support facilities responsible for computer systems, administration, surveying, accounting, stationery, maintenance, distribution and catering. All these aspects of the insurance company are interdependent, although there will be another side to the company which has little contact with anyone except senior management. This is the “group headquarters” where directors and owners of the company observe its activities world-wide and contribute to group strategy and image.
It would be impossible for one person to comprehend all the systems in place to perpetuate such massive organisations, not only from within but also to provide the energy and resources they require. Throughout is the attitude that “the company” is an entity greater than the sum of its parts. Staff will answer the phone in the name of the department or company rather than themselves, and speak in terms of working for the company rather than in it. This ethos runs through many organisations including those not based around profits like charities and political parties. But for the worker without a vested interest beyond his or her job security this attitude is essential to divert attention from the company’s real identity—its shareholders and directors. Tasks which would otherwise be pointless or objectionable are justified by being in the interests of “the company”. Staff accept they are secondary to this mythical entity, although initiatives promoting the idea of a “customer-focused” organisation attempt to give it a human helping face.
Top down commands
The competition which capitalism needs to function is reinforced in the insurance world through staff grading systems. A worker’s grade is related to his or her age and experience, and the level and complexity of their job.
Coupled with the employee being delegated their own responsibilities and workload through it, the grading system gives what could be called their “political niche”. Their position in the company dictates what information they receive, to what extent they can voice their opinions, how they speak to people and even who they speak to. Offices are riddled with ladders of authority and chains of command. Most people aspire to having a “higher” position and will work to try and achieve it, but there is a universal acceptance of the status quo which people only try to work within rather than improve. Strikes are unheard of and unions have little power and low membership, particularly among younger workers. This situation has arisen because working in insurance is isolated and comfortable compared to many other professions, particularly in the larger companies, and the “them-and-us” attitude is weakened when senior management are beyond reach and lower management are working in the same office as other staff.
The lowest graded workers are usually those who deal directly with customers and perform the basic functions of underwriting. However, managers are reluctant to give decision-making authority to them, partly because of their inexperience and partly because it would undermine their own authority. Therefore you have a situation where the lower grades constantly have to refer to others for authorisation even when they may be perfectly competent to carry out the decision themselves. The insurance profession thrives on this sort of inequality, even though it is a constant frustration to those who realise the situation, everything comes down from above — decisions, information, workload, attitudes, and there is little the average worker can realistically do to improve this for themselves, except try to make the orders rather than take them. Women usually suffer more from this system than men. Although more are reaching senior positions than before, the management of insurance companies is still an “old boy’s network”, and most women don’t fit into the boozing chumminess which lies behind many of the important decisions.
Profit patter
As with most areas of work, insurance has its own technical terms. An esoteric environment leads to a particular method of speech, which in this ease takes workers away from emotive, practical thoughts and makes them think and talk in vague, inhuman terms like “competitiveness”, “the market” and “profitability”. The nature of insurance is to regard things — factories, cars, people — as economic units and the only way to do this is to speak and think in a particular way. For example, an underwriter calculating a car insurance premium wouldn’t think “Is this driver responsible and safe enough to drive without being likely to cause accidents?” He or she would learn to think “Is this driver safe and responsible so they won’t incur any claims, which would cost this company money?” Personnel strategists are keen to develop the idea of the “corporate worker”— someone who answers the phone in the accepted way, is perfectly organised, stress-free and never makes mistakes. Courses are run all the time to develop this kind of attitude, intended to make workers think about the interests of the company before themselves. There is also increasing pressure to study for insurance qualifications, available up to degree standard, which give an understanding of the profession around which to base a method of thinking. This form of education doesn’t encourage workers to think about any alternative ways of dealing with property and losses, and therefore only aims to perpetuate the system.
Despite the social engineering, workgroups within insurance aren’t motivated primarily by profit because it remains abstract to those below section head level. Older workers are more likely to be shareholders, have profit targets to meet and would have been in the profession long enough to be conditioned by it. Most lower-grade workers believe profits are a good thing for the company and themselves, reflected in bonuses and job security. But their motivation primarily stems from wanting to be efficient and responsible, and in the long term to further their position in the company. This style of work is about achieving what is expected or asked of you, or more, and not thinking about the system at large or any alternatives. The differences between what motivates workers of different ages echoes the grading system and prevents the existence of a common goal, which would be the prime motivator in socialism.
As insurers compete with one another for business, departments compete for a greater share of the company’s profits and workers compete with each other for jobs. For those caught inside it, the insurance world is a mass of internal politics, delegation, procedures, competition, customer focus, corporate image and above all, money around which everything else must revolve.
CLIVE HENDRY