Leading the Way in Reinsurance – a Q&A with Head of US Casualty Reinsurance, Mike Clifton

Chaucer have once again been voted top in Gracechurch’s annual Leading Underwriters Report, with first place rankings in both Reinsurance and War & Geopolitical Risk classes and three underwriters in each class ranking highly in the individual ‘winners and leaders’ ratings.

One of the strongest-rated teams in the report is our Reinsurance team, with Head of US Casualty Mike Clifton and Senior Class Underwriter Ryan Ward placing joint second as individuals and Head of Global Reinsurance, Chris Baker, placing joint 7th. The team has been voted top four for the past five years in a row.

We spoke to Mike to find out what makes an award-winning team.

Originally, I was a tree surgeon! But when some friends started planning to travel around the world, I decided to go with them. Tree surgery didn't pay well enough to take a year out, so being a naïve country lad and believing the streets of London are paved with gold, I thought I would work in the City for a year to earn a huge amount of money quickly.

I got a job at DP Mann Syndicate, which is now Faraday, but a year later when it came time to leave, I realized that I loved the world of reinsurance and wanted to stay. I did ten years at DP Mann and ten years at Aspen before joining Chaucer in 2013 where I have now been for over ten happy years. Ryan joined me at Aspen shortly after I did, and then joined me at Chaucer, he's been with me every step of the way. 21 years we've been working side by side.

Good collaboration. We are a small team, particularly considering the size of our income, so we punch above our weight, which you can’t do if you don’t work closely with your team. We are dependent upon but also supportive of each other; for example, we're very consistent with our messaging.

Of course, longevity in Ryan and I working together helps as we have the same philosophy and ideals, but the same applies to newer or younger members of the team; we have each other’s backs. Brokers find that if they ask any one of our team members for something, they'll get the same answer, regardless of who they ask. Consistency is valuable in this market.

Reinsurance does not have a steady working pattern, we have very busy peak renewal seasons such as 1st of January or 1st April, and then very quiet periods, particularly over summer. A few months before key renewal dates, clients will visit London and I ask my team to respect our clients by being available for them. When clients have travelled all the way from America to see us, we have to be there even if that means very long days and several dinners in a week.

The flip side is, in quieter times, if people want to take a longer time off or enjoy a broker day, I’m happy for them to take some time back. We need that flexibility in our roles, but to achieve that you need to trust each other.

Equally, when business travel takes several of us out of the office, we can’t say to the broking community and clients that nobody's available. We rely on colleagues to step in, even on accounts they've never dealt with, to read up on the accounts, make sure they understand the history.

We also send a timetable out to all the brokers to tell them when we're going to be at the box in Lloyd’s and if we say we're going to be there we must be there.

Because we're in London where there's a very big, mature domestic market, we tend see the tougher risks which are hard to place elsewhere, but it’s still a competitive marketplace with 28 companies writing the same business. So, we need to be open minded, a bit more flexible and think hard about more complicated risks. We need to be careful with our analysis, but also be true innovators, in order to be successful.

We do still have a distinct appetite however and often have to say no to risks that don’t fit well. To build positive relationships when you’re having to be careful about what you write, you have to work a bit harder and make sure you do client meetings, even if you aren’t sure you’re going to write a certain piece of business.

If the broker needs representation and the client wants to understand the market, we like to help our brokers out and represent London. Sometimes this happens even if it’s not going to always result in a direct benefit to the team – there are indirect benefits and commerciality at play.

What we do in my team is long tail business and reinsurance is such an important purchase for of a lot of U.S. Companies, sometimes it’s the biggest single item that they will buy during the year. We have a lot of clients that we've had 25-year relationships with, however, who came with us to Chaucer.

This has meant that we are able provide synergies with other sides of the business, as our clients trust us. Across the London team we always make sure everybody's aware of the wider offering of Chaucer and when we're with clients, see if there's anything else the other teams can do. We work as a group rather than just the individual team they're talking to.

We’re lucky that we have some very experienced colleagues in the wider team who have been at Chaucer a long time so know our business inside out. For example, our Head of Global Reinsurance Chris Baker – who also placed in the top ten reinsurance underwriters in Gracechurch’s report - has been here 20 years, starting as an underwriter. He knows Chaucer and the market very well.

We also work closely with our Bermuda office and often do joint client meetings in the States with James Holliss, our Head of office there, as they receive much more business directly than we do.

At the moment, we're studying the market, and it looks like that there is a need for more capacity from London. The London Casualty Reinsurance market has already grown in recent years, probably doubled over the last few years, but it's a smaller part of the treaty reinsurance market, which is huge, around $250 billion. Of this, Casualty is around 20%, $50 billion, and London write up to about 10% of this at its peak. So, although a lot more business is coming to London and we’re becoming a lot more relevant, we're expanding along with that, as one of the leading specialty (re)insurance groups in the market.

As I’ve said, Bermuda is also a key location for us. This year we recruited a new colleague, Arjun Ranadev, who is settling with his family out there now, and we are hoping this growth in that market will help us access more of the United States.