Ian Posgate

The Arab-Israeli Six-Day War in 1967 was “good money”, he said, while Vietnam was “in a league of its own. I made millions out of it — millions.”

Posgate specialised in insuring ships plying the Mekong River in the thick of the fighting. He charged a monthly 5 per cent of the cargo value and whenever claims came in, as they tended to be in the dry season, he doubled the premium. When claims slackened off in the rainy season he dropped them back to 5 per cent. Only later did he discover the reason for this seasonal variation. “When it was dry,” he said, “the Viet Cong could almost put a bazooka through a porthole, because the river was only 30 yards wide. In the rainy season it was three miles wide — out of range.”

His general strategy was to charge premiums that were “just at the level of pain” — the top end of what clients could afford. He was so successful that he cornered a fifth of Lloyd’s marine business, which excited envy and made him many enemies. “Most of the underwriters here are cowardly, cosseted and cosy,” he said of Lloyd’s. “And there is an establishment mafia that does not like me.”

He found that he was always being hauled up to the Lloyd’s committee room. “After a while I learnt that if there was tea on the table, they were going to be kind to me. If there weren’t any teacups I was in for a rocket.”

Posgate was of a City generation that cherished eccentricity. The cut of his three-piece suit was reminiscent of a backwoods Conservative MP. Convivial to a fault, after a libatious lunch at one of Leadenhall Street’s wine bars he would return to his office and sprawl across a sofa, spectacles perched at a comic angle on his domed forehead.

Another time he and a friend were greeted by a man. While his friend returned the greeting, Posgate remained silent. When his friend asked Posgate why he kept quiet, he replied: “I can’t remember. But I don’t speak to him.”

Posgate had the indiscreet charm of a character from a Simon Raven novel. He rejected the then conventional Lloyd’s view that the “names” — Lloyd’s jargon for investors in insurance syndicates — should accept some unprofitable policies pro bono. Instead he took his cue from his rugby-playing days, preferring to “flatten the opposition”.

Posgate said: “An underwriter has a duty only to his names. Lloyd’s is a marketplace and, providing your behaviour is ethical, you only write business that is profitable to your names. I believe in dog-eat-dog, in survival of the fittest, not protection of the weakest.”

He usually made big profits for his syndicates, earning him as much as £800,000 a year, which was enough in the Seventies to make him one of the highest-paid men in Britain. His personal wealth ran into tens of millions and he made fortunes for many of his names. Among the indulgences he afforded himself was a box at Goodwood. In 1980 his life was insured for £10 million.

This was, however, a time when large-scale corruption was spreading through Lloyd’s. Underwriters such as Posgate were allowed to write policies on behalf of several syndicates, and a distinction grew between those financed by external names and the so-called baby syndicates backed by insiders and their friends. Underwriters often placed the lowest-risk, more profitable policies with these baby syndicates, which were later banned.

When Ian Hay Davison became Lloyd’s first chief executive recruited from outside in 1983, to clean up the mess, he said: “It wasn’t just a matter of a few rotten apples. The whole barrel was tainted.”

Posgate said: “They wanted it to be a club, but I’m not a clubbable fellow.”

Like many talented traders he needed a good manager. He joined Alexander Howden, a big firm of Lloyd’s brokers and managing agents, so he could be guided by Kenneth Grob, Howden’s chairman, known as the Grobfather. It was a disastrous combination. Posgate was also allowed to run his own agency, Posgate and Denby. Those in the know quietly entrusted their money to Posgate and in 1981 elected him to the Lloyd’s committee.

However, that year the game was up. The US insurance giant Alexander & Alexander bought Howden, and its accountants discovered that about $55 million (£27 million at the exchange rate at the time) was missing. Some of this had gone to trusts in Liechtenstein that benefited Grob and Posgate.

Posgate was cleared of misappropriating funds, but — apparently as a reward for steering his syndicates’ business through Howden — he was found to have accepted a Pissarro painting, Route du Fond de l’Hermitage. In true Posgate style he admitted the bribe, but said that the painting was “not that good, not that expensive”. It marked the end of his underwriting career.

A Lloyd’s disciplinary committee recommended that Posgate be banned from underwriting for life. On appeal the ban was commuted to six months’ suspension. When he tried to resume his career no one would take him on.

He lost what turned out to be his last legal attempt to re-enter the market in July 1986, when the judge Lord Wilberforce said that he had shown “negligence and disregard” for the well-being of the hundreds of Lloyd’s names on whose behalf he acted. The next year the fraud squad arrested Posgate. He and Grob were put on trial and acquitted in 1989.

Although the stress had added to Posgate’s girth in those two years, he was still defiant. He became a name, and lost £500,000. “The trouble now is,” he said, “that they let the good business be spread around. When I was underwriting, I kept the good business.”

Ian Richard Posgate was born in 1932 in Wembley, north London. His family then moved to Oxfordshire, where his father had a leather goods business that had grown out of his paternal grandfather’s dealings in rabbit skins.

There was enough money to send him to Merchant Taylors’ School, where he played in the first XV for two years and excelled at maths. He went up to Trinity College, Cambridge, but left early for the City. Posgate’s father got him into Lloyd’s, where he joined Frank Davey’s syndicate, which at the time was one of the smallest.

Posgate had met Margaret Scott, an Irish nurse, at a hospital dance when he was doing national service in Chester. They had married in 1956 and had three daughters and a son. Richard followed his father into insurance and works for the US firm Aon. Clare was a nurse who became a barrister. Jane, an artist, worked for Christie’s, and Bridget worked at Asprey, the Mayfair jewellers.

Posgate had an affair with Laura Davies, his PA, which came to light during his trial — he ran up an overdraft paying for a home with her — and he was quoted as saying: “It was foolish on my part, but if you are in love you do foolish things.”

The marriage to Margaret was dissolved and in 1990 he married Sally Hunter, an artist whom he met at a gallery when he was buying paintings. She survives him, along with the children from his first marriage.

Posgate devoted much of his later years to his grand country house and cattle farm near Henley. He liked the theatre and Glyndebourne, dabbled in business ventures and summered at Cap Ferrat. His close friends included the bestselling novelist Jeffrey Archer, another serial risk-taker.

Ian Posgate, insurance underwriter, was born on March 31, 1932. He died in hospital after a short illness on July 7, 2017, aged 85