There are fewer more recognizable names in the reinsurance broking industry than Rod Fox which is why his tie-up with the venerable Jim Stanard last year – which was first revealed by IQ’s sister publication The Insurance Insider – caused such a frisson last year.
Stanard, the founder of cat specialist RenaissanceRe, is widely respected for his forensic understanding of the reinsurance business which has fuelled the Bermudian firm’s consistent outperformance since its launch in 1993 while Fox’s irrepressible enthusiasm, client focus and deal-striking mentality has stood out from his earliest EW Blanch days when he swiftly came to the attention of US broking veteran Ted Blanch.
But if the Fox/Stanard tie-up is an odd couple partnership then the word on the street is that it is working. Indeed, their launch of Tiger Risk – a high-end US reinsurance broking boutique – a year ago perhaps could not have been better timed. The last year, for example, has seen a number of potential competitors swept away, not least Fox’s alma mater, Benfield. Clients keep complaining that they want more choice.
Yet, how does Tiger Risk overcome the received wisdom that to succeed in reinsurance broking you not only need distribution and high-end advisory capabilities, but also a reservoir deep resource of analytics? In other words, will sophisticated clients still support boutiques, even ones as ambitious as Tiger Risk? As the industry yet again arrives at Monte Carlo for the Reinsurance Rendez-Vous, IQ finds out about the progress Tiger Risk has made in its first year, and what is next on the horizon.
IQ: At the time of the TigerRisk launch, you said there was space for a high-end indie reinsurance broker, one year on can you give us a progress report?
FOX: Everything is going well and I am excited about the progress – no one said it would be easy, but when we started the firm we believed there was a market and an opportunity for a very high quality enterprise with a laser focus, and every day that has been validated. Revenues are very positive and we are finding that our underlying assumptions are borne out in terms of the quality of service and the calibre of the advice that companies require: we started with a list of 25 companies that we wanted to do business with – all fairly significant, global/national companies – and we’re now doing business with nine of them.
We have offices throughout the US and our affiliation with BMS in London is very positive. We have clients across the country, but the majority of them are between Boston and Philadelphia.
We are concentrating on US property and casualty business and it’s been a pretty good mix so far, probably about 60 percent property catastrophe and 40 percent specialty casualty business.
IQ: And we heard you have been attracting some high end talent too – can you give us some more details?
FOX: Yes we now have about 32 people and have recently added some more technical modelling people. And we recently established a joint venture with independent CAT risk modelling company Karen Clark and attracted high-end talent in the form of CAT modeling pioneer Jayant Khadilkar. By way of background, in addition to building the AIR model with Karen, Jayant developed all the proprietary internal models for Renaissance Re and was a very close partner with TigerRisk co-founder Jim. Our charge to Jayant was that we don’t want to just duplicate what all the large brokers already do, which is to provide modelling services based on looking at people’s exposure and come up with what their probable maximum loss would be. We want to be able to tell people how to manage their exposures on a higher level and how to really buy reinsurance to address the risks inherent in their portfolio. So Jayant has worked diligently to assemble our capabilities which we are now utilising. And together with Karen Clark we will go in and help very large companies think more clearly about CAT risk throughout their organisation.