Delusions of competence [electronic resource] : the near-death of Lloyd's of London 1970-2002 / Robin Pearson.

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Delusions of competence [electronic resource] : the near-death of Lloyd's of London 1970-2002 / Robin Pearson.

9783030940881 (electronic bk.)
3030940888 (electronic bk.)
303094087X
9783030940874

Cham, Switzerland : Palgrave Macmillan, 2022.

English

1 online resource.

10.1007/978-3-030-94088-1 doi

HG8598.Z9

368.0120604212

This book examines the crisis at the famous insurance market, Lloyd's of London, during the late twentieth century, which nearly destroyed the 300-year-old institution. While rapid structural change resulting from system collapse is less common in insurance than in the history of other financial services, one exception was the Lloyds crisis. Hitherto, explanations of the crisis have focused on the effects of catastrophic losses and poor governance. By drawing on contemporary accounts of the crisis, the author constructs the first comprehensive scholarly analysis of the public and political response. The book applies theoretical concepts from behavioural economics and economic psychology to argue that multiple delusions of competence were at work both within and outside the Lloyds market. Arrogance, elitism and defence of vested interests comprised endogenous elements of the crisis. Entrenched ideas about the virtues of self-regulation and faith in insider experts also played a role. The result was a misdiagnosis by both insiders and politicians of what ailed Lloyds and a series of reforms that failed to address the underlying causes of its disease. This book offers a salutary lesson from recent history about the importance of the transparency, accountability and effective monitoring of financial institutions. It is of interest to academics and students of economic and financial history, business, insurance, political economy and history. Robin Pearson is Professor of Economic History at the University of Hull, UK. He has published widely on British and international economic and business history, with a particular focus on insurance. .

Includes bibliographical references and index.

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Palgrave studies in economic history.

ebook version : 9783030940881
Print version: 9783030940874
DELUSIONS OF COMPETENCE.

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