You know how I am always going off about how the insurance industry has this huge reputational millstone around its neck, and that it really would be in its best interest to deal with it, despite the fact that doing so will require a very long, sustained effort?
It’s because stuff like this happens. Basically, back in 2007, an agency in Germany ultimately affiliated with Munich Re held a party in a Hungarian bath for 100 of its top producers. 20 prostitutes were brought in to service the producers. Those wearing white armbands were reserved only for top-level executives. The women were stamped on their arm each time they serviced a producer. Apparently, the agency even bragged about the event in their company magazine.
I know. I suddenly feel the need to wash my hands, too. You’d think this sort of thing doesn’t happen anymore, but sadly, it does. A woman I know spent a brutal few years working in Wall Street right out of college, and she was on the trading floor. Sexual harrassment doesn’t even begin to describe what she endured, and by year’s end, she got a rather remarkable bonus that amounted to a “thanks for not suing us” payment.
Now, I suspect there are some who will read about how a Munich Re subsidiary held an orgy as a collective attaboy for its top producers, and think, “Hmm. Too bad I missed that.” But for those of us who might be a little skeeved out by the thought of attending a corporate function that looks like the last 30 minutes of “Eyes Wide Shut,” allow me to observe that when you are one of the world’s biggest reinsurers, and when you are in the midst of a major global branding campaign, news of company-sponsored Bacchanalia is not the best thing for your image.
It does say a lot that even for a company like Muich Re, which is so huge and dominant in the insurance world, the very nature of its reinsurance merited a quick primer from the BBC when mentioning it, noting that it is insurance for insurance companies. The average person will not care to retain that. The average person will chalk it all off to financial services or worse, just a generic notion of “insurance companies” – as if they are all the same – and let the news entrench itself in their default story about how the entire insurance world is governed by some form of depravity or bastardy.
The party mentioned in this BBC story happened a few years ago, and to even peg it to Munich Re seems a bit unfair, as the news indicates it was part of an agency that was part of a subsidiary that has since been folded into the parent. And the folks who organized the party are all gone. And yet, reputationally, there stands Munich Re, somehow looking like it still has lipstick on its collar.
It is not fair. It is not accurate. And it is also the way that it is. Lest any of us give in to the Pavlovian urge to simply shrug and assume the industry’s reputation will never be much good anyway, remember this: every time a law comes up to regulate your business, every time your company is in front of a jury, every time a carrier’s name is mentioned in the media…these are the things that form the background to reputation. The things that gain approval or denial to things like fair tort verdicts, legislative support and even customer acceptance.
Personally, I think Munich Re should have come out with this a long time ago, if they had the chance to do so. (For all we know, Munich Re itself leaked the story just to get it out of the way.) I have been in this business long enough to know that there will always be a certain level of moral opportunism, shall we call it, to it. We see it especially in the halls of government, but in business too. And while it might not be realistic to expect all business to conduct itself as if it were raised in a monastery, it would help if and when professionals act in a manner unbefitting of their station, that the industry can at least deal with the situation quickly and crisply, or at least deal with it with the knowledge that maybe the public will give them the benefit of the doubt. It’s a crazy dream, I know, but a good one.