Partner Re’s Patrick Thiele may have just clinched the mega-merger of the year with a $2bn takeover of rival Paris Re, but, as he insists to David Banks, this chief executive is just doing his job

Just call him Mr Modest. PartnerRe’s chief executive, Patrick Thiele, has pulled off the deal of the year, acquiring rival Paris Re for a cool $2bn and leapfrogging his way into the top 10 world reinsurers in the process. It must take a cool head and a steady hand to see through a deal of that size – but Thiele likes to insist he’s actually very “boring”.

We’ll be the judge of that. In his first interview since the deal was completed, Thiele speaks to Global Reinsurance in Paris, and outlines his plans for the future, his personal management style and, of course, the thinking behind that mega-merger.

But first, some numbers. PartnerRe began the year as the world’s 12th largest reinsurer, and will end it as the eighth, with approximately $5bn in net premium writings. The pecking order as ranked by total shareholders’ funds could change even more.

A merger made good sense, even back in the darkest days of the financial crisis when this deal was born. PartnerRe has historically been a treaty shop – Paris Re will give it clout on the facultative side. Moreover, on the catastrophe side, Paris Re has focused more on frequency layers, while PartnerRe has built a severity-type book.

Stars aligned

So what made him go for such a big deal when all around him the economy was on its knees? “There are two ways to deal with difficulty in the market: diversify capital and diversify risk,” Thiele says emphatically. In one fell swoop, he did both.

That was aided in no small part, he says with characteristic modesty, by decisions made before his time. The acquisition of Winterthur in 1998 laid the foundation for PartnerRe’s global presence, and developing its infrastructure then allowed the company to take the next step and prepare for a further acquisition.

“You manage companies differently in a cyclical industry,” he says. “You have to make sure that when the stars are aligned, you have the infrastructure and people to hit the accelerator. When those positive market factors are not there, you have to have the trust in the management to stay with it.”

Thiele says PartnerRe is happy in Bermuda, but that his only concern will be group supervision and mutual recognition issues in light of EU moves such as Solvency II.

“Bermuda needs to be seen as mutually recognised. I don’t think it’s going to be an issue, but out of everything, that is the real uncertainty. The ABIR [Association of Bermuda Insurers & Reinsurers] and the Bermuda Monetary Authority are working together. The BMA’s task is to work with the IAIS [International Association of Insurance Supervisors] on that matter.”

Is the deal a sign of things to come? Don’t hold your breath. Paris Re was backed by private equity, so it made sense for the backers to get out early. It was for this reason, rather than any financial troubles, that the sale went through. Paris Re was doing well and PartnerRe regarded it as the ideal vehicle to complete its geographical diversification.

So, $2bn lighter, Thiele will be keeping his chequebook firmly shut in the months ahead. He says there are no further acquisitions on the drawing board – though he is keen to explore organic growth, especially in emerging markets – with no launches of additional business lines.

“On the non-life side, I think we are well-diversified in every line and every geography we would like,” he says. “Where we would like to see organic growth in the non-life side is in emerging markets – China, Brazil – where we think we have a good platform for future growth, though pricing and profitability outside of Brazil seem to be pretty challenged.”

Closer to home, Thiele doesn’t feel the need to have a finger in every pie. “There are a few holes that we are comfortable having. For example, we have no Lloyd’s platform,” he says. And while PartnerRe reinsures Lloyd’s syndicates and corporate names, Thiele does not foresee a Lloyd’s presence in the near term.

Not for the glory

This all sounds like solid stuff, but what of the man behind the numbers? Seen as a calm, analytical and affable presence at the reinsurance top table, Thiele certainly does not fit the model of an ‘imperial’

chief executive. And it’s an image he’s keen to play up to. “Things have changed. People complain that chief executives all sound so boring now,” he says. “But I don’t think a company should be personalised, or anthropomorphised, to take on the identity of one person.”

He admits, however, that the art of reinsurance management has improved in the last 15 years.

“The ability of the industry to price risk is better today than it was. Since 2000 and 2001, the industry has been writing an annual return in the double digits for nine straight years,” he says.

Thiele’s own management style was learnt during his 21 years at St Pauls Companies, which he joined as an analyst aged 27, rising through the ranks to become chief executive of international business in 1996.

It was a formative experience, and one which Thiele reckons marks him out. “There are not many chief executives who started out in the investment analysis business. I’m not sure why; I would think it was a natural breeding ground for senior executives.”

So much for the past – what will his legacy be? “I think it would be nice to leave a good company that stands on its own feet and that someone else can take over … is that boring enough for you?” he says, smiling. “When I retire, it is my fond hope that my colleagues wish me luck and a week later have forgotten that I worked there.”

Not that anyone is anticipating his retirement just yet. If nothing else, Thiele will be remembered for sealing the Paris Re deal – and the impact of that will be playing out for a long time yet.

David Banks is deputy editor of Global Reinsurance