Brokers must present clients with multiple options in ‘extraordinary’ market: Fox

​To succeed in the truly “extraordinary” market conditions the re/insurance industry is navigating at the moment, it is essential that brokers always have more than one plan and communicate consistently and regularly, both internally and externally, Rod Fox, the managing partner and chief executive officer of TigerRisk Partners, told Intelligent Insurer.

“This is probably the most extraordinary market I have seen in my lifetime. In a market such as this, I like being way ahead; you always want to have multiple options,” Fox said.

“We tell our people: ‘if you have one plan, you have no plan’. You need multiple options and those must constantly evolve.

“You also need to communicate a lot—internally and externally with clients, as much as possible.”

He said the market is facing such a daunting time because of the confluence of challenges facing it, many of which pre-dated COVID-19. These include several years of heavy cat losses (including in 2020), social inflation, low interest rates, economic volatility, credit exposure—and losses from COVID-19 and business interruption claims on top of that.

“You have this coming together of different things hitting the market and I don’t think people have fully tallied all the losses,” Fox said.

“The market was suffering from a poor loss experience before the pandemic, which I also think will be a high loss.”

​“We tell our people: ‘if you have one plan, you have no plan’.” Rod Fox, TigerRiskFox was speaking during a deep-dive interview held on Intelligent Insurer’s Re/insurance Lounge, an online platform where interviews and panel discussions are held live on a weekly basis and content is available on demand at any time to members.

He added that, on the back of all this, rates are moving upwards in almost every part of the market globally and he expects that to continue. But he said that, despite this, the industry is not yet in the exact definition of a hard market.

“We haven’t seen the complete retraction of capacity from lines of business yet—that would indicate a true hard market,” he said.

“I remember the days where I had a pit in my stomach because the capacity just did not exist—at any price. There are some divergent opinions on where the market should be, how to play it, what the capital structure should be like. But capacity remains available.”

He expects around $10 billion of new capital to enter the industry but believes investors are being cautious, preferring to back tried and tested structures. And he stresses that, in the context of the industry’s global capital base of upwards of $600 billion, this will not be enough to make much of a difference to rates.

“There is capital coming in but there has been a flight to quality in terms of the structures they are willing to support,” he said.

Fox reflected on his career in the industry, from working for Ted Blanch at EW Blanch, to Benfield, to forming TigerRisk some 12 years ago. He aims to be the third biggest reinsurance broker in the world very soon, an achievement he said is testament to the broker’s culture, approach and business model.

“When we started we thought there would be more efficient ways to bring risk to capital—and felt there would be a place in market for a high-end boutique reinsurance broker.

“We have come a long way. It has been a hard lift—to come in with nothing—we have had a great time but it is not for the faint-hearted,” he said.

The company’s culture has been important to its success, he said, as has its ability to embrace analytics and deliver their outcomes in a way that makes sense to and can help clients.

“We saw an ‘arms race’ of analytics—people were spitting out reams of data but no-one was explaining what that meant. We tried to bring a different level of analytical tools and help clients make businesses more successful.”

The head count of TigerRisk has grown by 25 percent this year and will continue to increase for the rest of the year as the firm expands its geographic and product footprint.

Fox passes on the following lessons from his career: “It is pretty simply stuff. Have fun but work hard, learn, and meet everyone.

“Relationships still matter,” he concluded.

To see the full interview with Rod Fox, visit the Re/insurance Lounge.