Obituary: Former Independent CEO Michael Bright dies aged 78

Michael Bright, the controversial former CEO of UK commercial insurer Independent Insurance and erstwhile darling of the City, has died.

Bright – who was imprisoned in 2007 for financial fraud, six long years after the collapse of his listed insurance company – was to the outside observer almost a caricature corporate villain. Overbearing, at times flamboyantly arrogant and with a penchant for pinstripe suits and lavish entertainment, he built Independent Insurance into a leading UK commercial insurer during the pre-dotcom era of the 1990s.

But as liability/casualty pricing weakened and policy language became more feeble as the decade edged towards the millennium, Independent’s results defied the consensus. It was also an anomaly that was becoming increasingly difficult to explain as Independent’s UK market share grew. Investors were not complaining, however. At one point the company was worth over £1bn on the London Stock Exchange, making Bright (and many of his colleagues) extremely wealthy on paper.

However, just like the US’s Reliance and Australia’s HIH, the fateful year of 2001 was to be a day of reckoning. Growth could not keep pace with loss developments, even with the aid of manipulation.

All three firms imploded. It was a timely reminder of the famous passage in Ernest Hemingway’s masterpiece, The Sun Also Rises. “How did you go bankrupt?” Bill asks the grizzly WWI veteran Mike.

“Two ways,” he replied. “Gradually and then suddenly.”

Before their 2001 downfalls, geographic boundaries largely kept the three businesses apart in a competitive sense but the trio all had much in common. They specialised in casualty/long-tail business, had dominant CEOs (Reliance’s Saul Steinberg and HIH’s Ray Williams) with weak boards and all had published inaccurate results with hindsight. All had A- financial strength ratings from either AM Best or S&P until days before their collapse.

Remarkably, it took the Serious Fraud Office six years to prosecute Bright (Williams pleaded guilty in late 2004 and was jailed the following year). When he was finally found guilty in 2007 at Southwark Crown Court, Bright struck a tearful and much diminished figure. It was revealed that a damning internal audit on reserves had been concealed, liabilities hidden, figures manipulated and reinsurances were invalid. Bright blamed others.

Within the industry, there were few tears shed for his humiliations but equally those who knew him say it is too simplistic to view Bright purely through the prism of his hubristic downfall.

Bright, for all his failings, also had talent. He was a business builder and supporter of young professionals. Independent’s marketing strategies were lively, aggressive and energetic and he was a shrewd adopter of affinity distribution techniques. He knew how brokers operated and was an expert at both entertaining them and developing smart schemes and broker clubs. He could be charismatic and was a generous supporter of charities.

But sadly the collapse of Independent and its repercussions mean this is not how he will be remembered within the UK insurance industry. He passed away earlier this month aged 78 and is survived by his family.