For four generations of Newhouses, a family of high-powered insurance executives that today includes a top official at one of the world's largest reinsurance brokerages, insurance has been the family business for nearly a century.
But while the first Newhouse in the business entered it when he hung a shingle in front of his own agency, the family largely has stamped its imprint on the industry through publicly-owned companies, particularly Marsh & McLennan Cos. Inc.
Today, Britt Newhouse is chairman of reinsurance intermediary Guy Carpenter & Co. LLC, a Marsh & McLennan unit where his father was a senior executive. While the younger Newhouse's children have opted to pursue careers in other fields, two nephews -- the fourth generation of Newhouses -- are working at Guy Carpenter.
The Newhouse family's entrée to the business came in the 1920s, when Britt Newhouse's grandfather, Robert J. Newhouse Sr., opened an insurance agency in New York. The agency, Newhouse & Sayne, served as the marine and aviation underwriting managers for the Home Group and The Employers Group in the United States and Canada. It also acted as excess and surplus lines brokers, underwriters and reinsurance brokers.
Robert J. Newhouse Jr. worked at his father's agency for eight years, starting in the claims department and later becoming an assistant underwriter.
The younger Newhouse attended Princeton University for a while but left school in his sophomore year for military service during World War II. After the war, he didn't return to school. Instead, while working again for his father, he began carving out a noteworthy place in the insurance industry and risk management profession.
Newhouse Jr. joined Guy Carpenter, where his son is now chairman, in the 1950s, eventually moving up to chief operating officer. Eventually, he was invited to join Marsh & McLennan to work with Jack Regan, who retired as chairman and chief executive officer in 1986. Regan died in January 2011 at age 89.
Newhouse was president of Marsh & McLennan from 1976 until 1988. After a brief stint as vice chairman, he retired in 1990 and consulted for the company afterward.
During his time there, the company acquired C.T. Bowring & Co. Ltd., which enabled Marsh & McLennan to become a Lloyd's of London broker and facilitated its expansion into major marketplaces worldwide, such as Brazil and France.
In the mid-1980s, the brokerage created new excess liability capacity at the height of the insurance industry's worst-ever liability capacity crunch by committing hundreds of millions of dollars to help form Bermuda facilities ACE Insurance Co. and Exel Ltd., now XL Capital.
He also played key roles in building Bermuda-based multiline reinsurer Mid-Ocean Reinsurance Co. Ltd., which merged with Exel in 1998 to form XL, as well as Axis Capital Holdings.
Meanwhile, two of Newhouse's sons were building careers in the insurance industry, while a third son rose to prominence in the financial-services industry.
Two of them have since retired.
Robert J. Newhouse III, 65, joined Marsh & McLennan in the 1970s as a marine and energy broker. In 2001, he retired as chairman and chief executive officer of Marsh & McLennan Americas, the company's U.S., Canadian and Latin American operations.
Stephan F. Newhouse, 64, was a fixture at investment bank Morgan Stanley & Co. for a quarter century from 1979 until he left, as president of the company, in early 2005. He is currently a director of Bermuda-based property/casualty insurer Alterra Capital Holdings Ltd.
Britt Newhouse, 58, joined Guy Carpenter in 1979, after underwriting marine hull coverage at American International Group Inc. for about four years.
Although he's from a family steeped in the insurance industry, Newhouse majored in Russian studies in college. "I wanted to use a language, and my interest was in Russia at the time; it was the beginning of détente," the easing of strained relations between the then Soviet Union and the United States. "AIG had connections to Russia, so I thought that international global business is where I'd go and that I'd try the insurance industry to see if I liked it."
His particular interest was in reinsurance. Unlike other financial services areas, he felt he could be part of the entire process of identifying and resolving a problem for a client by crafting a solution that would benefit all of the involved parties. No one has to suffer a financial loss to demonstrate the solution was a sound one, he said. "It's not a win/lose proposition."
After college, Newhouse took advantage of a business opportunity that resulted from his father's friendship with Maurice R. Greenberg, who ran AIG for decades and was a significant "trading partner" with Marsh & McLennan, Newhouse said. Greenberg and Newhouse's father "grew up in the business together," he said. "Hank made sure I had an opportunity to work at AIG. I'm not embarrassed to admit I took the opportunity."
Newhouse recalled the reception he and other new underwriters received from Greenberg in AIG's boardroom after completing a six-month training course. "He said, 'If anybody thinks we're not in business to make a profit, leave now.' Then he gave us all a pad and pencil to keep by our bedside to write down ideas we had during the night."
As chairman of Guy Carpenter, Newhouse's 20-year goal is building the reinsurance intermediary into a truly "global business rather than just a U.S. company with international operations." That means an equal split of U.S. and global business.
Outside of the office, the Newhouse brothers and their father, now 86, have a close relationship, Britt Newhouse said.
Despite his family's many generations in the industry, Newhouse said he holds fast to an old adage his father imparted to him many years ago: "It takes a lifetime to build a reputation, and you can lose it in an instant forever."
Newhouse added: "When people decide you're not trustworthy, you might as well pack it in."
-- By Dave Lenckus
February 21, 2012
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