Michael Deeny

Michael Eunan McLarnon Deeny (born 12 November 1944) MA (Oxon) FCA, is a concert promoter and prominent Name of Lloyd's of London.

The eldest son of a doctor, Michael Deeny was born in the small Northern Irish town of Lurgan.

Deeny was educated at Clongowes Wood College before graduating from Magdalen College, Oxford in History.

After leaving university, Deeny trained as a chartered accountant and worked at Chalmers Impey in the City of London before moving to the Irish company Kennedy's Bakeries.

Deeny worked as an accountant for three years before switching full-time to the music business.

The transition began when, somewhat whimsically, Deeny and his friend Paul McGuinness persuaded the Scottish singer Donovan to come out of semi-retirement (and self-imposed exile) to play at the Royal Dublin Society.

Subsequently, Deeny organised a Royal Dublin Society festival with many prominent musicians of the time, including: The Crazy World of Arthur Brown, Manfred Mann's Earth Band, and the genre-defining Irish Celtic Rock band Horslips.

Shortly afterwards, Deeny became Horslip's manager.

Deeny's strategy with the band was to move them from the Irish cabaret club circuit of the time, and into the more lucrative dance-halls.

He also insisted the band should tour outside Ireland to increase their fan-base – even if that meant risking a short-term loss.

Consequently, Horslips were one of the first Irish Bands to gain substantial success outside Ireland.

Beginning in the early 1980s, Deeny began to manage the English singer Murray Head, seeing him through the peak of his career with the album and musical Chess and the worldwide hit One Night in Bangkok.

He was also briefly the manager of Irish featherweight boxer Barry McGuigan.

It is widely acknowledged that Deeny's management of Horslips paved the way for the success of the Irish rock band U2.

Nick Stewart, the man who signed U2 to Island Records, even went so far as to describe Michael Deeny as, "the godfather of Irish music".

Deeny's desire to break Horslips out of the Irish music scene and to a bigger audience had a strong influence on Paul McGuinness.

In the book 'Unforgettable Fire: The Story of U2', journalist Eamon Dunphy claims that McGuinness expressed, "a desire to one day find his own 'baby band' and with them apply to rock 'n' roll the lessons Deeny had applied to folk-rock with Horslips".

Members of U2 also acknowledge Deeny's influence on their success.

In their autobiography, 'U2 by U2', Bono comments that Deeny "really taught Paul McGuinness all he'd known...".

Deeny has continued to work as a concert promoter (mainly in France with business partner Gérard Drouot), working with high-profile acts including Pavarotti, U2, Bruce Springsteen, Nirvana, and The Eagles.

This practice seemed to work for many years until the 1980s when health claims due to asbestos and environmental damage started to emerge.

It quickly became apparent to many Lloyd's syndicates that their predecessors had dramatically underestimated future claims, causing them significant losses.

Another problem that emerged around the same time was dubbed the LMX Spiral.

It involved syndicates protecting themselves against huge losses by seeking reinsurance.

For example, an insurer might sell a policy for an oil rig offering cover for any level of disaster, but would then seek to buy reinsurance for any claims over £10 million.

This was a common practice but was unregulated, permitting syndicates to reinsurance each other without keeping track of who exactly was liable.

In an interview for the Telegraph, Deeny described the LMX spiral as follows:

"The spiral involved incompetent underwriters who could not find enough normal decent insurance business so they ended up just reinsuring each other. The risks were going around and round in circles, the brokers involved were taking commission and the risk ended up being concentrated at a small number of syndicates at Lloyd's."

Consequently, many syndicates had considerably underestimated the funds they required to protect against claims, causing significant losses for many Names.

Due to the turbulent nature of concert promotion –and the possibility of substantial financial losses– Deeny invested in becoming a member (a 'Name') of Lloyd's in 1985.

Shortly after Deeny became a Name, several serious problems emerged within Lloyd's, causing severe losses for many members (including Deeny himself).

The total lost at Lloyd's between 1988 and 1992 was estimated to be £8 billion.

This occurred for several reasons.

Due to the nature of Lloyd's business, it was often the case that a Name was liable to pay for claims made on policies established before they became members.

This was because Names of Lloyd's were required to join groups called syndicates, which existed for one calendar year.

Each syndicate was organised by a managing agent who hired underwriters to sell insurance to brokers.

When a syndicate disbanded and estimated its profit or loss, it had to account for the fact that some claims might have been incurred but not reported that year.

It also needed to account for the fact that many insurance policies are valid for longer than one year.

A syndicate would therefore make an estimate of the total losses that might be incurred from each policy in the future, and then buy reinsurance to cover these estimated future losses.

Such reinsurance was often sold by other Lloyd's syndicates – often by the same syndicate who simply reformed in subsequent calendar years.