Headhunters get a wide perspective on the qualities which (re)insurance companies are looking for to lead them in the new century. Lee Coppack explains.
As P.J. O' Rourke called one of his books Age and Guile Beat Youth, Innocence and a Bad Haircut, so in the future a degree - or two - in mathematics, professional qualifications and business skills will beat charm and good connections as a path to leadership in the (re)insurance industry. The leaders of the international (re)insurance industry will need a combination of qualities and skills beyond those which have traditionally assisted a rise to the top. Particularly as financial markets converge, quantitative skills and imaginative thinking will be essential parts of the armoury of the aspiring industry leader with first class business skills needed to move to the highest level.
“There is no single template”, says headhunter Robin McWilliams of Alexander Hurst. “However, there will be a much greater emphasis on candidates' academic and professional background.”
At Bluestone, Jane Goldstein and Neil Anderson are finding a similar pattern. Mr Anderson comments: “The people who will really rise to the top will be multi-skilled.” Ms Goldstein adds: “Many of these people will have spent time outside the insurance industry and will have earned their stripes in consulting.” She cites Ron Sandler, former management consultant who became chief executive at Lloyd's and is now at NatWest bank, as an example.
Insurance specialist Alistair Gossage at the Rochester Partnership, says: “What separates most of the people is an intellectual capability, along with sound commercial judgement. They are highly focused; they do not follow conventional wisdom and they genuinely understand where the industry is going.”When it comes to the chief executives, Simon Hearn of Russell Reynolds Associates says there will be a different type of person in future: “This person will be as much a businessman or woman as a technical person, by which I mean that they will not be coming up the underwriting route so often.” Instead, he suggests, there will be a chief underwriting officer as well.
He explains that the spreading influence of US companies and investors is resulting in a demand for people with a background in running a profit and loss account, so the chief executives of the future need good management and strategic skills. In addition, companies are looking for chief executives who understand marketing in the broadest sense, brands and product and business development and who have good man management skills.
In London, especially, educational qualifications were not a priority in the past. Less than two years ago a survey by executive search firm Russell Reynolds of 100 senior managers in the UK insurance industry revealed that more than half of them had no degree and that 41% had no A levels (academic exams taken by 18 year olds in schools in England and Wales). Now, says Mr Gossage: “The CVs we receive on people who are achieving their careers inevitably seem to include a university education, which was not there before.”
Mr McWilliams believes that the days are numbered for the well connected young man who left school at 16 with no qualifications to succeed in the London market. He says: “Many people will leave the market and the sooner they take that in, the better.”
Adds Mr McWilliams: “The market will be full of people with degrees in science or maths. Many more will go for professional qualifications. Yes, there is a question of which of these qualifications are worthwhile, but we do expect to see greater academic standards and professional competence.”
He describes the leaders of the future as more likely to be very clever technocrats who think in the long term and rely less on personal friendships than deal makers of the past, although social skills will still be important, especially in face-to-face markets like London.
“The leaders of the future will also be well informed and naturally curious. They will read the major business publications and be aware of issues outside their own sphere,” says Mr McWilliams.
Mr Hearn believes that the number of people in the industry today who have the skills and qualities to meet all the needs of the future is limited and that companies will need to have the nerve to hire from outside. He mentions, for example, an academic who went into derivatives who has now been hired by a broker, and whom he describes as “a very able, strategically minded person.”
At Bluestone, Mrs Goldstein and Mr Anderson both emphasise the importance of quantitative skills for success in the future. “There is a trend at the moment which I do not see stopping,” says Mrs Goldstein, “of actuaries having a much higher profile and working increasingly with the underwriter, making sure that they get the business written on correct terms. Analytical skills are coming more to the fore.”
She says the market for non-life actuaries is very competitive. “There area number of non-life actuaries who are not yet qualified who are commanding a six figure package which within the reinsurance industry is very high.” This is not surprising as in the United Kingdom, there are still less than 200 non-life actuaries. Mrs Goldstein adds that there is also interest in people with engineering skills, not specifically for engineering but for their ability to quantify risk.
Mr Anderson points out that the period of consolidation has meant people with strong financial skills have been playing an important part in running organisations. “Their role has been very influential in the last 10 years.”
In the 21st century, job movement is likely to become even more the norm than it is today, partly because of the convergence between different types of finance but also because, says Mr McWilliams, people are becoming moreaggressive in managing their own careers. “I foresee that the leaders of the future will be more like condittiore, efficient mercenaries who do a job well but have little loyalty to any particular organisation,” he explains.
Mr Hearn, too, believes there will be a generation of chief executives who will move on from one position to the next. “They will be growth merchants who will not necessarily stay.” There is likely to be more continuity, he believes, with the chief underwriting office.
Bluestone's Mrs Goldstein says: “Because of mergers and acquisitions, new organisations are being created out of two or three with different cultures. New people will come in who do not have the previous terms of reference to effect this change and they are likely to move on once this has been accomplished.”Mr McWilliams suggests particularly with ART type roles, there will be moreswitching of jobs between reinsurers and other financial institutions. “Both will want people who are highly numerate and who have good judgementin the absence of full data.”
The rising stars
Mr Gossage comments: “There are people who epitomise the industry as it has been, and there are people who epitomise as it will be going forward.” The following is a completely unscientific survey by Global Reinsurance of some of the rising generation chosen by an informal poll of people with a wide view of the (re)insurance industry: headhunters, journalists, consultants and people in the industry.
Our aim was to find people who are going to stand out in the next 10 to 20years, more so than the famous names of today. It was notable that a comparatively small number of people seemed to stand out as exceptional, those whom one observer described as “rising stars who stand high above the canopy of the very good.” Why are women high fliers so thin on the ground? “It is still a male dominated industry,” says a headhunter.
Here are some who shine. Our apologies to those we missed.
Unexpectedly, Bermuda did not produce a whole host of names. Some of thosementioned regularly are: Rob Lusardi, formerly a managing director ofLehman Brothers and now group finance director at XL Capital, and ex-Lloyd's underwriter Henry Keeling, now in charge of XL Mid Ocean Re, and at ACE, former Mercantile & General and Liberty Re chief executive, John Engeström who now heads its property-catastrophe subsidiary Tempest Re. Herbert Haag who has transformed ParterRe from a mono-line property- catastrophe reinsurer to one of the largest reinsurance companies in the world in the space of about two years.
Jean-Luc Bourgault, directeur général of Le Mans Ré which has just done adeal with XL Capital to recapitalise the company at FFr 1 billion. RomainDurand, directeur général of life reinsurance at SCOR. Luc Malatre, deputy directeur général at the independent broker Gras Savoye; Eric Paire, chief executive, Axa Ré, Paris; Sylvie Van Viet, director of retrocession at SCOR.
German and Swiss companies
At Bavarian Re, Dr Alexander König, king of the holistic risk managementtool Ricasso and Dr Klaus Wieland, head of life reinsurance, are describedas young, bright and full of ideas.
Hans-Peter Gerhardt, a member of the office of the chairman of General & Cologne Re, and Cologne Re's asset management specialist, Jürgen Meisch.Former head of the casualty-fac unit at Cologne Re, Alexander Quack-Grobecker who moved to Gothaer Re as a member of the board of management.At Zurich Re, US educated Dirk Lohmann who was a member of the management board of Hannover Re and E&S Re until his move in 1997.
Munich Re's rising generation is represented by Dr Nikolaus von Bomhard who becomes a member of the board of management from 1 January and who will be responsible for the group's business regions of Spain, Portugal and Latin American, and Clement Booth, who for some years ran Munich Re's South African operations. He is currently the only non- German on the board of management.
Patrick O'Sullivan, chief executive general insurance at Zurich FinancialServices, is said to have “wonderful management techniques”.
Dr Immo Querner, executive vice president of Gerling has a credit insurance background but is now involved with strategy and mergers and acquisitions. UK educated actuary Prakash Shimpi, head of financial solutions for Swiss Re New Markets.
Aon in London produces several names: chief executive Denis Mahoney, plus Matthew Grimwade, who has done one of the first and biggest weather deals in the UK and the team of Donald McDonald and Richard Posgate, who set up Aon Re UK.
Specialist reinsurance broker Benfield Greig is regularly named as one of the most interesting firms in the market. Graham Chilton the chief executive and David Spiller, the managing director, plus Benfield Greig Interactive director Mark Birrell are all well regarded. Joanna Buckenham, managing director of, J.K. Buckenham Ltd., is proving that a smaller broker can do well even in a market dominated by giants. Oliver Peterken at Willis who is part of the mathematical revolution. The name almost universally mentioned is Tim Carroll, first chairman of the new London company market organisation, the International Underwriting Association (IUA) and chief executive of ERC Frankona's London market non-life operations. “A notable reinsurance leader of today and going forward.” Also, Adrian Ballardie, the ceo, Axa Re UK.
Graham Fulcher, formerly with Cologne Re and now group actuary at Lloyd's agency Cox. His CV was described as “probably the best I have ever seen”.ART specialist Martin Davies, formerly with Sedgwick and now with Cologne Re in London and Dublin. At Lloyd's, David Mann and underwriter Nigel Barton of the agency DP Mann, now owned by General Re, and Brockbank Group underwriter Nick Metcalf.
Nick Prettejohn was named chief executive of Lloyd's last year at 38, having joined Lloyd's in 1995 as head of strategy. His opposite number in the company market, Marie-Louise Rossi, chief executive of the IUA, is mentioned for excellent political skills.
Stephen Riley now managing director of CNA Re's London operations after a short stint at Lloyd's agency CLM and three years as managing director of Swiss Re UK; John Spencer, a director of Lloyd's broker BMS Associates, is mentioned by several people in the London market for his all-round ability; Perry Thomas, young managing director of Reinsurance Group of America (UK).
Marcus Broome and John Doran of Room Underwriting, Rowan Douglas, managing director of WIRE Ltd., David Lister, head of the underwriting supportsystem unit of Computer Sciences Corporation (CSC), and Hemant Shah, a founder and senior vice president of California based Risk Management Solutions (RMS).
Jérome Faure, number two at SCOR US; few would be surprised if Bernhard Fink, head of ERC Frankona, moved up in the organisation. Jeffrey Greenberg, just elected ceo of Marsh & McLennan. It has been suggested that he would return to American International Group when his father, Maurice Greenberg, retires but Jeff Greenberg insists he is working to keep Marsh out front. At Guy Carpenter, Paul Little, senior vice president with the global risk management department who advises public sector organisation on catastrophe risk management, and Troy von Kutzleben who impressed an observer recently with his understanding of technology issues.
Mark Mosca, president and ceo of Risk Capital Re, the first to set up an operation that provides reinsurance and supports its client with an investment; Ian Sinclair, chief executive, Unionamerica, run “like a collegiate partnership”; Mike Wacek, a non-life actuary who was running the St Paul Re operation in London and left to become president and ceo of TIG Re and now Odyssey America Reinsurance Corporation; Michael Watson president at Odyssey Re, London.
Lee Coppack is co-editor of Global Reinsurance. E-mail: email@example.com.