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By JONATHAN KENT, a business reporter and editor based in Bermuda

HAMILTON, Bermuda --- Charles Dupplin is not your typical CEO. A Scotsman who moved from London two years ago to head the Bermuda operations of Hiscox, Dupplin is a qualified barrister who can put an accurate price on a Monet and who can occasionally be found carrying a longbow and three arrows while guarding the Queen of England. Not to mention that he's a family man, organic farmer and a member of Europe's only legal private army.

Brought up in a farming family in rural Perthshire, eastern Scotland, Dupplin went south for his education in English boarding schools and at Oxford. The prestigious university helped to nurture Dupplin's wide interests. He thrived, as captain of the Oxford clay pigeon shooting team, a real tennis player and part of the Cresta Run team, which involved tobogganing down a three-quarter mile ice run in the mountains near St. Moritz, Switzerland.

With his qualification as a barrister under his belt, as well as experience as an associate in corporate finance at Credit Suisse First Boston Ltd., Dupplin had to choose a career path. A conversation with the Hiscox chairman helped him opt for insurance.

"I was invited for a tea with Robert Hiscox," Dupplin recalled. "I liked him very much and he made me an offer. It didn't seem that lucrative at the time, but he promised me there would never be a dull moment." In his 21 years since with the insurer, Dupplin added there has indeed "never been a boring day."

Dupplin started off in the private client department and soon moved on to run professional indemnity. In 1995, he started a five-year stint running Hiscox's network of continental European offices, before becoming chairman of the art and private client business. One great pleasure of his career has been exposure to the weird and wonderful world of fine art, one of Hiscox's major insurance lines.

"I like art a lot, but I'm fascinated by the art market," Dupplin said in a recent interview. "There is a distinction between the two things. The art market is the largest unregulated market in the world with an annual turnover of $50 billion. It's full of crooks, swindlers, marvelous characters, very honest people, ludicrous, dreaming academics and very pretty girls in short skirts."

Mixing with this eclectic crowd at regular get-togethers including the Art Basel Miami Beach and the New York Armory Fair proved stimulating for Dupplin. It wasn't enough to simply hand out his business card. He had to be accepted as "part of the scene" to succeed in an insurance niche where trust was at a premium. Art underwriting was far more challenging in his early days with Hiscox than it is today, he suggested.

"In 1990, you had no Internet and very poor data collection systems," Dupplin said. "So you really had to know what a Monet might be worth. Now you don't, because there are all sorts of websites where you can get the auction data. It doesn't stop all sorts of funny frauds being attempted though.

"On my watch, we had a file on the frauds called 'Money for Old Rope.' I say file, now it's about ten lever-arch files full of sometimes very sophisticated cons. I'm glad to say we've never been caught out by that."

Dupplin, 48, has achieved a healthy work-life balance and maintained his interests outside work, many of which are connected to his beloved Scotland. His good friend and fellow Scotsman David Burns, managing director of Schroders' in Bermuda, describes Dupplin as "an interesting and interested person." Burns said, "Apart from sharing the same nationality and enjoying reeling, we always seem to have lots to talk about and only rarely do we discuss business."

One of those interests is in being an Atholl Highlander, part of the Duke of Atholl's private army--these days a purely ceremonial regiment of around 100 men that Dupplin would like to persuade to visit Bermuda to parade with bagpipes and drums.

He is also a member of the Royal Company of Archers, which serves as the Queen's Bodyguard when she visits Scotland. Last September, Dupplin was among the guard when Queen Elizabeth met the Pope in Edinburgh. Sporting green uniforms and eagle-feathered hats, and armed with bows, arrows and swords, Dupplin and his colleagues continue a tradition that goes back more than three centuries.

"I was asked a long time ago whether I would join the Archers," Dupplin said. "Then your name disappears into a hat. In about 2000, my name came out of the hat, so I've been in the Bodyguard since then. It's immense fun."

Dupplin's role has occasionally brought him into conversation with the monarch and her husband, the Duke of Edinburgh. "The Queen is a very inspirational type of person," he said. "She's a mixture of absolute fastidiousness about things being perfect and flashes of great humor. Her husband is particularly humorous. Quite often, I've guarded him at an event, standing right by him while he's chatting to people. He's immensely funny. He might say things which are not politically correct, but he never says them maliciously and he's an amusing and sympathetic character."

One of the things Dupplin had to give up when he moved to Bermuda was the Monday night shoot at Kensington Palace, when the Bodyguard would practice archery skills.

Dupplin is also a farmer, having bought a "hauntingly beautiful" 200-acre spread adjoining his father's farm in Perthshire producing organic carrots and pedigree Suffolk sheep to sell to major supermarket chains. Rising food prices allowed the farm to post a rare good year in 2010 and to catch up with some overdue infrastructure upgrades.

Together with wife Clare and daughters Alice, Catriona and Auriol, Dupplin has adapted well to life in Bermuda. In a small community of around 62,000 people, the everybody-knows-everybody social life is not unlike that of Perthshire, where "you can't walk down the street without saying 'hello' to five people."

What is different about Bermuda-- apart from the weather--is the presence of a global insurance and reinsurance market.

"Unless you're in the industry, it wouldn't occur to you that on a nice, hot island, there could be a world-class, world-beating, world's biggest market," Dupplin said. "You have 1,500 of the greatest characters in reinsurance wandering the island, all knowing each other. You go into a restaurant and you spot A having dinner with B and you immediately wonder what's going on." Trading industry gossip is a popular pastime.

After a first quarter in which the Bermuda reinsurance market estimated combined catastrophe losses topping $5 billion from natural disasters in Japan, New Zealand and Australia, Dupplin sees the potential for a dramatic uptick in rates.

"If we get one more big punch, then I think it'll be a very hard market," he said. "I think just one medium-sized hurricane making landfall in the United States would be enough to send things off, because there's a smell of fear." The combination of increased earthquake risk awareness and a trend of long-term venture capital seeking to exit reinsurance companies would add to upward pressure on pricing, he said.

Dupplin sees the U.S. and Bermuda markets as "intertwined," with the island providing the capital America lacks to underwrite its massive catastrophe risks. The relationship will continue, even if changes are made to U.S. tax rules to levy more on foreign reinsurers, he reckons.

"That would not stop the need of Americans for Bermudian capital," Dupplin said. "It won't stop the Bermudians wanting to underwrite American risk. It just changes the economics of it. Somebody is going to end up bearing any additional tax bill and it won't all be the Bermudian entities. Insureds will bear some and domestic companies, too, I would expect. So I think the wilder rhetoric that goes on is usually misguided because the reality is that America and Bermuda need each other."

Bermuda has seen several prominent companies shift their domiciles to Europe in recent years.

Dupplin believes the change of government leadership with the election of Paula Cox, who succeeded Ewart Brown as Bermuda's premier last October, will stem the tide. "The whiff of corruption has evaporated," Dupplin said. "I'm a big buyer of her stock and I think she's creating an environment that's already noticeably more business friendly."

June 1, 2011

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