By ROGER CROMBIE, a Bermuda-based columnist for Risk & Insurance®
A generational change is coming over the Bermuda (re)insurance market. An A-list of insurance and reinsurance entrepreneurs is making way for a younger generation of professional managers. As Steely Dan put it: "If you live in this world, you're feeling the change of the guard."
Some famous names are sailing off into the late afternoon, rather than the sunset. In 2010, few retire in the traditional sense of hanging up their spurs and settling back into their easychairs. Almost everyone these days "semi-retires," to take a senior nonexecutive position or advisory role that may take less time but requires no less passion.
A DON DEAL
The best example might be that of Don Kramer, serial founder of successful insurance businesses. In mid-March, Ariel Holdings, the 2005 startup that he helped found and has led ever since, announced that George Rivaz would succeed Kramer, who has taken the role of nonexecutive chairman for a year.
At 72, Kramer retains his thoroughly active mind, so few expect him to disappear entirely from the scene. He started at least five successful insurance businesses, including Nac Re and Tempest Re, and served as vice chairman of ACE. Kramer intends to remain in Bermuda, where, extra-curricularly, he has become a major force in the development of dance, a great love of his. He has also acted as a bridge over the sometimes-troubled waters of the public-private partnership, the undertsanding that a sensible-regulated insurance sector is in the interests of both the government and the governed.
Rivaz and Kramer have form, as they say. Rivaz has been with Ariel since its establishment in December 2005, serving initially as co-president and, since early 2008, as president. He was also there at the start of Tempest Re.
CASH IS KING
Not long before Kramer's news hit had come the announcement that Ken LeStrange--founding father, chairman, president and CEO of Endurance Specialty Holdings--was also "retiring" to serve in the nonexec chairman capacity for a year. Twenty years younger than Kramer, LeStrange has been equally successful in his career.
He started as an underwriter with Hartford Insurance Group; managed treaty underwriting operations at Swiss Re; was president of American Re's alternative market subsidiary, Am Re Managers; and was chairman and CEO of Aon's retail brokerage operations for the Americas--all before founding Endurance.
LeStrange has plans to keep himself occupied. He owns an interest in two noninsurance businesses, one with his brother, the other with his best friend. He's about to become more involved with both, plus he and his wife have established a charitable foundation, "like Bill and Melinda Gates, but with fewer zeros," as LeStrange describes it. He's also planning a mid-June fishing trip to Alaska with his son. The word "retirement" clearly doesn't apply.
LeStrange's successor at Endurance is a true Bermuda success story. At 42, David Cash has been with Endurance since its foundation. A Rhodes Scholar and an actuary, he gained experience with Tillinghast/Towers Perrin in New York, Zurich Re and Centre Solutions in Bermuda, where he focused on structured finance and insurance programs.
Everyone in Bermuda is thrilled to see a son of the soil take command of a major insurer--which has happened only once before, when Brian Duperreault returned to the Island to head up ACE.
A 12.6 percent stakeholder in Endurance, Perry Corp., however, urged the company to merge its way forward, rather than relying on organic growth. Endurance has succeeded well enough as a player in more than a dozen niche markets, returning an average 14.9 percent on equity since Day One, but Perry wants more growth more quickly. Some people are never satisfied. The disagreement trundles on, with Cash telling Risk & Insurance® that he has no plans to seek a merger.
Jim Bryce led IPC Re Holdings throughout its 15-year life, until it was assimilated into Validus Holdings in mid-2009. Bryce will be slightly less busy following his retirement from IPC, although as he told Risk & Insurance® over dim sun in London in December, he's not ready to walk away from the industry completely.
His appointment to the board of Bermuda-based (re)insurer Omega Insurance Holdings was one of the less controversial aspects of a recent sea change at the company that saw Invesco, which held a 29 percent stake in Omega, attempt (and fail) to force through board changes in the wake of the departure of the departure of nonexecutive chairman Walter Fiederowicz and nonexecutive director Christopher Clarke. The drama took months to resolve. When the dust had settled, Bryce was on board.
TO BE FRANK ...
Scott Carmilani has not retired. He is still president and CEO of Allied World Assurance Co., but he has handed control of the Bermuda and international insurance operations to Frank D'Orazio. Responsible for a third of Allied World's total business, D'Orazio sits over the insurance operating platform for Bermuda and the European theater, which consists of underwriting operations in Dublin; London; and Zug, Switzerland. He's been with Allied World for more than seven years.
Neil Currie has not retired; he is still CEO of RenaissanceRe Holdings. But in January, the company appointed Kevin O'Donnell executive vice president and global chief underwriting officer. Veterans John (Jay) Nichols Jr., and William J. Ashley are retiring from the company, both having served for many years.
With Peter Durhager moving up to EVP and chief administrative officer, the shape of things to come is much clearer at a company that Currie recently confirmed to Risk & Insurance® still employs more computers than people.
BRIAN AND MIKE'S XL-ENT ADVENTURE
Within the past year, Brian O'Hara completed his career at XL Capital, having been replaced as CEO by Mike McGavick, who has engineered a turnaround. O'Hara has been enjoying some skiing and is pursuing various unnamed business interests in his semi-retirement. He was visible at the World Insurance Forum on the Island in March, every bit as interested in the industry to which he has devoted his life as he was when his view from the summit was cloudier, but less snowy.
RUST NEVER SLEEPS
Insurance is about experience. The more you know, the more valuable you are. Unlike those cultures in which old people are sent into the wilderness to die when their "sell-by" date is reached, Bermuda finds space for its veteran insurance executives who want to stick around.
Like the rock 'n' roll stars of the 1960s, whom they increasingly resemble in their golden years, Bermuda's senior execs don't stray far from the main stage.
April 1, 2010
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