Lord of insurance

Following his appointment as a peer in April last year (the first Muslim to be nominated by the Conservative Party) the chairman, chief executive and majority shareholder of broker Camberford Law, Mohamed Sheikh opted for a new title. It leaves little to the imagination: Baron Sheikh of Cornhill in the City of London.

It is a fitting handle for a man who seems to have a finger in every insurance-related pie. The only practising broker in the Lords, the self-styled – and somewhat self-promoting – mouthpiece of the insurance industry was offered his place after just two years in politics by then leader of the Conservative Party, Michael Howard. He was appointed to the all party parliamentary group on insurance and financial services last year.

Showing me his House of Lords portfolio, he declares: “One hundred years after I die, this will be the masterpiece. Like Churchill’s speeches.”

In his brief stint at the Lords, he has commented on a range of insurance related issues, including competitiveness, training, terrorism, motor accident fraud, and most recently, flooding.

The grandeur of the chamber in Lords, which he proudly shows me around, is a far cry from his childhood. Born in Kenya and raised in Uganda, his parents originated from the Indian sub-continent. His family was expelled from Uganda in 1962, and came to the UK penniless.

This could help explain his curious mix of selfless devotion and self-promotion.

Change of heart

Having arrived here to study medicine, he had a change of heart and decided instead to enter insurance. It is a decision he has not regretted.

Lord Sheikh joined specialist niche broker Camberford Law in 1974. He now owns 80% of it. He has made the business his life, and even employs his 29-year-old daughter, Zarina, who is an underwriter on leisure schemes.

Yet despite his evident passion for the industry, he seems reluctant to discuss his own business in any detail.

“Our motto is we lead others forward,” he says, somewhat obliquely. “We have people, we have capital. We have the right products for the right markets.”

He is a little more willing to discuss broader trends in the market, including broker consolidation. He thinks brokers, being more resilient than in the past, will adapt to market needs. “History shows us there have been many attempts in the past 20 years or so to predict the demise of the insurance broker, none of which has been true,” he says

On medium sized brokers being the current target for insurers, he draws a parallel with the acquisition of estate agents 15 years ago. “Maybe this is a distribution issue for insurers to gain larger market share,” he adds. “With smaller brokers, of course, there are multiple systems issues.”

Skills shortage

Moving on, it is not hard to see which issue is closest to his heart.

“The first word of the Koran is ‘read’,” he says.

He is clearly worried about a skills shortage developing in the market.

“We have a lead on insurance globally. We rely a great deal on financial services. It is important we push the point on skills or we may be left behind,” he warns.

“We need to be innovative,” he continues. “Training needs to be done by the CII, but more importantly by the employer.”

He talks of establishing regional centres of excellence for training purposes, and applauds the work of the CII in its talent quest initiative, and the development of its broker academy. He won’t be drawn, however, on whether he feels it is doing enough. Perhaps that is because he is its lifetime vice president. He has similar praise for Biba – and perhaps for similar reasons, having been its chairman for four years.

In the Lords, he has pointed to research commissioned by the CII that revealed that almost half of its membership believed that new entrants into the insurance industry are less equipped than they were a decade ago.

As an attempt to stem the tide, Lord Sheikh established the Sheikh Abdullah Foundation, a charity in memory of his father, which helps further educate and develop of young professionals, including many in the insurance industry.

In May this year he presented the Young Broker of the Year award at the Biba conference.

“Our motto is we lead others forward. We have people, we have capital. We have the right products for the right markets

“We are relying on the skills and knowledge of our people. In addition to money you need to have people – there is capital in people,” he says.

“I hold training sessions in my office. I want the youngsters to know I know what I’m talking about.”

We move on to a discussion of the Lloyd’s market.

“At the moment the market is soft. We’ve got underwriters chasing us,” he begins.

When asked if he thinks Richard Ward is the right man for the job at Lloyd’s, he responds obliquely “every man is the right man”.

Much more telling, however, is his comment “My attitude is: I always talk about myself.”

On the question of the pace of reform at Lloyd’s, however, he is slightly more forthcoming. “We have to be mindful. We don’t want sudden change. It is so important that change is proactive as well as reactive.”

“The market has become soft. Very, very soft. Ten years ago it was the opposite. In a soft market, people have short memories.”

Create reserves

He continues: “People have to realise you need to create reserves. You can’t have the pendulum swinging from one end to the other.”

On the issue of flooding, he exclaims: “The industry has never flinched. When we do something right no one notices.”

“I raised the point of flooding defences four months ago,” he adds. “Not enough is being done. We need better defences and better drainage, too.”

In May, Lord Sheikh submitted a written request to the Environment Agency questioning the effect of inflation on flood defences, fearing that spending in real terms was not being maintained.

“It worries me the impact flooding will have on profitability,” he says.

Turning to terrorism and travel cover. “If someone wants more cover, they should take out a relevant policy,” he says, adding that the possibility of making travel insurance compulsory is “unfeasible.”

At present, one in three travellers opt not to take out cover. He emphatically rules out the possibility that Pool Re, the government’s disaster fund, should be used in such an event.

“It’s a can of worms,” he says.

“Insurers cannot solve this problem. It has to be solved by the government. You have to ask, is there political will for such a move? The threat hasn’t even been quantified yet.”

It could be argued that in his case, this puts him somewhere between a rock and a hard place?

What becomes clearer is that he considers himself some sort of prophet. While acknowledging that support for broadening the skills base in the industry is widespread, “People in the Lord’s are at the height of their expertise,” he says, implying that the tools to deal with it rest in his hands.

He does not doubt that insurance has been good to him. He invokes another great English statesman, Francis Bacon, to make his point.

“I hold every man a debtor to his profession. I’m indebted to mine.”

Though it remains somewhat unclear exactly what he will do to champion the industry’s cause from his pulpit in Westminster, he reminds me that his word was – at least at one time – gospel.