19 October 2019ILS

Five inspirational leaders

In the October issue of Bermuda:Re+ILS, we launched Bermuda’s Risk Transfer Hall of Fame. In every issue we will profile five individuals who have contributed significantly to Bermuda’s journey as a global risk transfer hub.

The launch marked the Bermuda Monetary Authority celebrating its 50th birthday—and the fact that it is some five decades since Fred Reiss started his pioneering work on Bermuda that led to the formation of the first captive and the start of what has become a global industry and key part of the worldwide re/insurance sector.

In those 50 years many other executives have contributed to Bermuda’s growth and development, following in the footsteps of Reiss in helping drive forward innovation while making huge contributions that have resulted in Bermuda’s becoming the world capital of risk transfer.

That is why this publication has created Bermuda’s Risk Transfer Hall of Fame.

In each issue, we will celebrate the achievements of five individuals who have contributed to this journey through Bermuda’s history. They may be still working or long retired. If they have contributed significantly to Bermuda’s journey, we will consider recognising them.

The individuals we choose will be selected based on a quarterly poll of our readers, which will encourage them to suggest names they believe are worthy of recognition, and the thoughts and judgements of our editorial panel. We will profile five new names in every issue going forward.

This issue features the second batch of executives, featuring five more industry legends.

But this is an ongoing process. If you wish to suggest someone you believe should be recognised for his or her contribution to Bermuda’s risk transfer market, look out for our poll or simply get in touch along with a couple of lines on your reasons.

We hope the individuals profiled on the following pages inspire readers and remind everyone that any individual can make such a difference if they have the drive and innovative skills. We look forward to hearing your future nominations.

John Charman

John Charman is a much-respected member of the re/insurance industry on Bermuda, with a formidable reputation as being a strong-willed and hard-working executive who accomplishes his goals. He has four decades of global experience in the insurance industry including senior underwriting positions since 1975 and a CEO role since 1981.

Charman is currently the executive chairman of the board of directors of Sompo International Holdings, and CEO of the overseas insurance and reinsurance business of Sompo Holdings, a role he took up in April 2019.

Charman had been the CEO and chairman of Endurance Speciality since 2013; Sompo acquired the business for $6.3 billion in 2017 when Charman took on his existing responsibilities.

Charman’s career started in Lloyd’s in November 1971 and by 1977 he had risen to a senior underwriting position within a large Lloyd’s marine syndicate.

A Hong Kong shipowner, C.H. Tung, occupied him for five years from 1981 before he returned to Lloyd’s to establish Charman Underwriting Agencies in 1987. He became CEO of Tarquin, the parent company of the Charman Underwriting Agencies at Lloyd’s, which was sold to ACE in 1998.

Charman was a deputy chairman of the Council of Lloyd’s and a member of the Lloyd’s Core Management Group and Lloyd’s Market Board between 1995 and 1997 during the financial crisis at Lloyd’s that saw the market undergo a period of significant stress.

Charman is said to have made his fortune during the 1991 Gulf War, offering war risk insurance on a 24-hour basis.

Charman had a reputation of being a hard taskmaster in London, albeit one who got results from people who worked under him. In an industry notorious for its long lunches and lavish entertainment costs, Charman’s puritanical approach of discouraging his employees from either habit raised some eyebrows.

Charman sold Tarquin/Charman Underwriting Agencies for £350 million in 1998 to the Bermuda-based ACE International Group, receiving £70.6 million in ACE shares.

Charman was made CEO at ACE Global Markets (the merger of Charman Underwriting and assets of ACE), and in January 2001 was named group president and CEO of Bermuda-based ACE International Group, but left the company in March 2001.

New ventures

In the immediate aftermath of the September 11 terrorist attacks and with rates hardening rapidly, Charman raised around $1.9 billion in capital and then set up AXIS Capital, a Bermuda-based reinsurance and insurance business with offices in London, Dublin, Zurich and New York.

That company grew rapidly under his leadership and is now pushing for a spot as one of the world’s top 10 reinsurers. He left in 2012.

In May 2013 he became CEO and chairman of Endurance Specialty Holdings, another NYSE-listed, Bermuda-based reinsurance and insurance business with offices in Bermuda, London, Singapore, Zurich, New York, and other locations. He is said to have invested more than $30 million of his private fortune in Endurance at the beginning of his tenure.

His ambition and outspoken views manifested themselves during the company’s high-profile and ultimately failed attempt to acquire Aspen in 2014. After many months of battle between Endurance and Aspen’s management team including several unsolicited offers, he eventually withdrew. Several years later, Aspen was acquired by private equity group Apollo.

In 2016, Sompo completed its acquisition of Endurance and Charman has held a senior position at the business since.

In the comments received from readers, Charman seems to be respected for his fortitude, work ethic and unrelenting ambition—as well as his knowledge of the industry and willingness to be outspoken on certain issues.

As one executive put it: “John Charman has had a hand in several formations on Bermuda and also for embedding the roots of several of the bigger companies here. He is known as a hard taskmaster but that is a good thing—he creates very well-run companies based around his deep knowledge of the industry.

“He will say it as it is—a refreshing change in an era of corporate speak. The industry needs more like him.”

Jeremy Cox

Jeremy Cox is the executive chair of the Bermuda Monetary Authority (BMA), with overall responsibility for all supervisory activities conducted by the BMA, including the supervision of banks, trust companies, investment businesses, insurance companies and the board of directors.

A native Bermudian, Cox earned his Certified Public Accountant designation in 1995 and is an alumnus of Northeastern University in Boston, where he graduated cum laude in 1989 with a BSc in finance and insurance.

He began his career at Arthur Andersen Bermuda as a senior and staff auditor. He subsequently joined the Registrar of Companies within the Bermuda government, where he served as a technical officer in the Insurance Division from 1993 to 1995, and was promoted to the position of Inspector of Companies, a post he held until 1999. He was then appointed Registrar, where his responsibilities included providing technical support to the Minister of Finance on all insurance-related matters.

In 2002 Cox was appointed as executive director and supervisor of insurance at the BMA, where he had responsibility for the overall supervision of Bermuda’s insurance market, and he was promoted to the position of deputy chief executive officer in 2008. Cox was appointed CEO of the BMA on January 1, 2010, and began a three-year term as the executive chair on January 1, 2019, in the latter case replacing Gerald Simons, who retired following nine years on the board, including six as chair.

Cox has led the authority through market milestones—most notably, its 2016 achievement of full equivalence with Europe’s Solvency II insurance regulatory regime. The BMA marks its 50th anniversary this year.

Natural leader

One reader who nominated Cox as a leader said: “Jeremy is the epitome of an authentic leader. Throughout his time as Registrar of Companies and his career at the BMA, he has led by example in striking the right balance between well-respected regulatory oversight and innovation.”

Another described him as being an “absolute legend” and said that the world needs more people like him.

Cox received the fourth Fred Reiss Lifetime Achievement Award at the annual Bermuda Captive Conference in June 2019.

The award, launched in 2016, is named in honour of Reiss, who conceived the idea of “self-insurance” by which corporations could manage their own risks through a dedicated subsidiary. Starting with American steel companies, Reiss pursued the concept in Bermuda, launching the first captive insurance company in 1962. The sector recorded exponential growth over the next five decades, distinguishing Bermuda as the world’s captive insurance leader and fuelling the foundation of the Island’s entire insurance industry.

“Jeremy is a key figure in the Bermuda market for his leadership of the BMA during a period when it has won global recognition and respect,” said Captive Conference chair Mike Parrish.

“His contributions to the Island’s insurance industry and other financial services sectors have demonstrated a commitment and vision that not only helped the BMA become globally recognised but, as a result, also strengthened the jurisdiction’s economic future.”

In June 2019 it was reported in the Bermudian media that the process of finding a replacement for Cox had begun.

Don Kramer

Donald (Don) Kramer is a veteran of the reinsurance industry on Bermuda. In a career that has spanned almost 60 years in risk transfer, Kramer has seen the industry change, evolve and innovate—and he has often been at the heart of many of the industry’s most important transformations.

Kramer established ILS Capital Management in 2011. At the company he is chairman of the management committee, chairman of the Investment Strategy committee and chairman of the board of the 1609 Fund. It is regarded as one of the most innovative insurance-linked securities (ILS) funds in the market, constantly evolving its offering to meet the needs of cedants and investors.

Before he founded ILS Capital, Kramer held numerous senior executive positions in insurance, banking and investments, as chief executive officer, president, chairman and general partner.

Kramer started his career as a security analyst working at Moody’s. Subsequently he became a general partner at First Manhattan Company, and Oppenheimer Company.

Throughout this period he focused on the analysis of life insurance and property and casualty insurance stocks.

He acted as a leading investment banker in the field, concluding several major acquisitions by publicly traded insurance enterprises. In 1964 the CFA Institute awarded Kramer a coveted Graham and Dodd citation for his article, “Life Insurance Profit Margins”, published in the Financial Analysts Journal. At the time, life insurance companies in the US were poorly understood by the investment community and did not file financial reports using generally accepted accounting principles. The article changed the way life insurance companies were evaluated in the marketplace.

A 1974 study of the property and casualty insurance industry issued by Oppenheimer and written by Kramer had a similar effect on property and casualty security valuations.

Further work

In 1975 Kramer retired from Wall Street and set up Kramer Capital Consultants (KCC), a management consulting practice which specialised in dealing with troubled insurance companies. During his years at KCC (1975–1984), he dealt with nearly all of the high-profile receiverships in the US, most often representing state insurance departments.

In 1984 Kramer acquired a somewhat inactive shell, North American Company for Property and Casualty Insurance, aka NACPAC. He started as the CEO and then turned the reins over to an experienced management team that he recruited. The company was initially purchased for $26 million and following several years of growth and financial development was sold to XL Capital for more than $1.2 billion.

Kramer served as chairman of NAC Re until 1993 when he retired and subsequently founded Tempest Re with private equity sponsors.

In 2005, he founded Ariel Holdings and its subsidiary, Ariel Reinsurance Company, a property catastrophe reinsurance company in Bermuda. He was chairman and CEO of Ariel Holdings until 2010.

His career has been recognised by the Insurance Federation of New York which awarded him an annual Free Enterprise Award.

Throughout his career Kramer has dedicated himself to numerous philanthropic organisations. His not-for-profit activities include membership on the US board of Chatham House, the global thinktank based in the UK. He is a member of the board, and previously chairman, of the American Ballet Theatre, the official national ballet company of the US, and is the chairman of the National Dance Foundation of Bermuda.

In 2011 Kramer received the Queen’s Medal and Badge of Honour of the British Empire for his work and philanthropy in Bermuda.

A number of well-known executives suggested that Kramer is a perfect choice for our Risk Transfer Hall of Fame list.

As one said: “When you think about who has really made a difference to Bermuda in terms of the number of successful companies that exist because of their efforts, Don Kramer is peerless.

“Plus he has a fantastic track record of philanthropic activities—and he is a really nice guy.”

Bill Riker

William (Bill) Riker was one of the earliest employees of RenaissanceRe and was a key member in its early years, before he retired and later died of cancer aged just 50 in 2010.

Riker joined RenaissanceRe in its founding year, 1993, and retired in December 2007 as director, president and chief underwriting officer with overall responsibility for enterprise-wide modelling and underwriting.

At the company Riker held the positions of chief operating officer of RenaissanceRe and president and chief executive officer of Glencoe Group Holdings, the Dallas-based segment of RenaissanceRe.

Riker was a chartered property casualty underwriter and a board member of the International Hurricane Research Center and Federal Alliance for Safe Homes. In addition, he served on the board of visitors of Duke University’s Pratt School of Engineering, and he was a foundation board member of Red Bank Community YMCA. Riker founded and was chairman of Q Re. A long-time resident of Rumson, NJ, Riker also lived with his family in Bermuda for 11 years.

Riker had a BSE. in Mechanical Engineering from Duke University. Prior to joining RenaissanceRe, Riker was vice president of Applied Insurance Research (AIR), one of the leading catastrophe modelling firms in the world, where he was responsible for marketing and educating clients about AIR’s CATMAP product. He was also senior vice president in charge of treaty and facultative operations for the New York-based reinsurer, American Royal Re.

Accolades and innovations

After he retired RenaissanceRe announced at the 2008 National Hurricane Conference in Orlando, Florida that Riker had received a Special Award.

The Special Award celebrated what it described as Riker’s outstanding contribution to the advancement of hurricane research and modelling. The awards committee noted his visionary leadership, supported by RenaissanceRe, to champion and fund some of today’s most important hurricane and loss mitigation research initiatives.

These hurricane-related initiatives include the RenaissanceRe Wall of Wind facility at Florida International University which subjects full-scale buildings to category 4 strength winds and rain in a reliable, repeatable testing environment.

Riker was instrumental in supporting the creation of a new attraction at Innoventions at Epcot at the Walt Disney World Resort in Florida which combined experiencing what it feels like to be in severe weather with learning about the associated risks and ways to protect the home in an interactive and entertaining setting.

Riker spearheaded the Hurricane Risk Mitigation Leadership Forum, held in February 2008 in Orlando, Florida, which brought together experts, scientists and policymakers to advance hurricane mitigation efforts and awareness.

One reader, writing anonymously when nominating Riker as a leader of reinsurance on Bermuda, said that Riker and James Stanard were the founders of RenaissanceRe and pioneers in better understanding cat risk.

“They changed the way catastrophe reinsurance was done. Bill Riker and James Stanard changed the way the world looked at cat risk and did much to put Bermuda at the centre of the knowledge and expertise developed to transform society’s ability to manage that risk.”

In his obituary, printed in the New Jersey newspaper Asbury Park Press, Riker was described thus: “Whether sailing on the Newport Bermuda race or playing a round of golf with his many friends, Bill embraced life with energy and passion.

“Everyone who knew Bill will always remember his enthusiasm, humour, and integrity. He was a loving husband, brother, and father and will be missed dearly by his family.”

Greg Wojciechowski

Greg Wojciechowski has been the president and chief executive officer of the Bermuda Stock Exchange (BSX) since 2002.

Established in 1971, the BSX describes itself today as the world’s preeminent fully-electronic, offshore securities exchange, offering a variety of domestic and international listing options.

A full member of the World Federation of Exchanges (WFE), and an affiliate member of the International Organization of Securities Commissions, the BSX is globally recognised and renowned and respected for its commercially sensible listing requirements. With more than 700 listings to date the BSX describes itself as a leading market for the listing of investment funds, debt and insurance-related securities, as well as those of small to medium-sized enterprise companies.

Prior to assuming the role of president and CEO in January 2002, Wojciechowski was the BSX’s chief operating officer. In this capacity, he was responsible for the development of the exchange’s regulatory and operational infrastructure as well as its day-to-day running.

Prior to joining the BSX in 1993 Wojciechowski, over a period of several years, held management positions at three large US brokerage firms. During this time his attention was focused on brokerage administration and operations in international and global markets.

Wojciechowski was educated in the US and received a BA from the University of North Carolina at Charlotte. He studied international business at the University of Copenhagen under Denmark’s International Studies Program and studied French and international relations at the Université d’Aix-Marseille (Institut Pour Etudiants Etrangers) in Aix-en-Provence, France. In 1998 Wojciechowski attended and completed the Young Managers Programme at INSEAD in Fontainebleau, France.

Wojciechowski is the chairman of Bermuda’s Financial Intelligence Agency and the past chair and a current committee member of ILS Bermuda. He is also on the board of directors of the Bermuda Business Development Agency and is a member of the council of the BSX.

He is on the board of directors of the WFE and is a member of the governance and nominations committee of that organisation.

The growth of an asset class

Wojciechowski is bullish about the state of the insurance-linked securities (ILS) market in 2019—and believes Bermuda remains
the natural location for this asset class to continue to evolve and develop.

Speaking to this publication in September, he said the state of the ILS market had changed substantially in the decade that he’d been attending the annual reinsurance event at Monte Carlo, and that ILS was no longer seen as an unwelcome participant in the insurance market.

Wojciechowski pointed out that ILS rose to prominence as an asset class partly on the back of the financial depression that gripped the markets in 2008, as investors looked around for something that promised returns.

The BSX has seen a wide range of ILS-related investments listed on the exchange over the past decade, helping to drive its growth and evolution. Within two years, the exchange had listed 25 structures with a total value of $3.373 billion. In 2017, the number of ILS listed securities reached 227, with a nominal value of $25.99 billion.

As one executive says: “Greg is always an ambassador for Bermuda and an ambassador for ILS growth generally. He believes in the potential of this form of risk transfer to have a massive positive impact on Bermuda and the world.

“There is no doubt in my mind that the last five years have been a key period for the development of this asset class and we will look back and understand the important role the BSX has played in its development.

“One day, ILS will be critical to managing risks around the world and Greg will have had a hand in that.”