Realising the potential

In an industry not necessarily known for colourful or extrovert characters, Rod Fox has always stood apart. Love him or hate him, few brokers have gained such profile in the reinsurance industry in a personal capacity—but Fox’s boundless energy, enthusiasm and dealmaking ability combined with his outspoken views have always made him stand out.

Ted Blanch first spotted and utilised these energies in Fox’s EW Blanch days. Then at Benfield, where he headed up the US operations, his passion and eye for an opportunity saw him complete a series of high profile industry transactions, which grew the UK-based broker’s US operations tenfold. His strategic acumen was again tested when he was brought into re-structure Praetorian Financial Group—again he came through before selling it to QBE.

Throughout his career, he has also honed another trait he has become famous for in the industry—his close association with the US Navy SEALs. Reinsurance broking and the US armed forces might not seem to naturally go hand in hand—but it is a relationship that has worked for Fox over the years and which continues to this day.

But now, Fox is over four years into building yet another business—this time, his own vision. And if it were possible, he is more energised than ever. He has been outspoken in recent years about the downsides of three big brokers dominating the reinsurance brokerage world. And he believes TigerRisk can shatter what he terms the oligopoly that exists in the market now.

“Quite simply, the fact that a small number of players control the market is not healthy,” he says. “The world has become smaller, more connected and with more complex risks. As such, clients require new solutions, greater creativity and more choices. Yet, in fact, today’s reinsurance buyers have fewer solutions, creativity and choices.

“We have created a specialised broker designed to offer very sophisticated reinsurance products, in-depth analysis and superior client-service supported by some of the most senior and well-known executives in the business. There was clearly a gap in the market for this type of player and we have filled that.”

The dream team

But while Fox’s energy and track record are impressive, there is another good reason to believe TigerRisk will achieve its ambitious goals. While Fox might take the limelight as the chief executive of TigerRisk, he started the business with another very well respected industry veteran in Jim Stanard, the founder of RenaissanceRe.

While some have called the pair an unlikely partnership, in fact, they complement each other well. Fox is the extravert dealmaker: the face of the company, its energy and ambition, the motivator of staff and fixer when it comes to clients’ needs. Stanard, on the other hand, is more thoughtful and strategic in his approach to business and a great technician when it comes to modelling and understanding risks.

Fox says the vision of what TigerRisk could become was clear in the minds of both executives from the start. “I had just sold Praetorian to QBE and I was sitting with Jim talking about the market. This was before Aon had bought Benfield, but even then we saw an opportunity due to the small number of brokers controlling the market. We believed even the most sophisticated clients were getting a basic level of service from brokers. Our vision was to form a very specialist high-end broker that could offer something different.”

So TigerRisk was born. Four years on, Fox says he is pleased with the way the company has developed. “It could always go faster but we are ecstatic as to where it is right now,” he says. “We sometimes ask ourselves, would we press the re-set button and have not done this. The answer is always ‘no’. We have already established a good market position and we are just scratching the surface of what we believe we can achieve.”

He says the biggest challenge was getting the company off the ground in the first place—and then competing in its fledgling days with the budgets of its bigger rivals. The company was launched in 2008 and Fox says there were many doubters.

“People said there was no way something like that could be started from scratch, but we proved them wrong,” Fox says. “Then, people said our competitors would crush us with their greater technology budgets. But, in fact, we have created capabilities at least on a par with what they offer if not superior in some ways.”

“I see my role as getting the best out of people and stretching people to realise their true capabilities. That, if you like, is my leadership style. I believe most people are more capable than they realise.”

The company achieved this with the help of risk modelling experts Jayant Khadilkar, the founder of Weather Predict who has joined TigerRisk as a partner; and Karen Clark, the former CEO of AIR Worldwide who now runs Karen Clark & Company. She has formed a strategic partnership with TigerRisk. As such, the broker has the modelling tools and expertise to match its rivals.

But it is in the way those tools are used and interpreted that Fox really sees TigerRisk as offering a cutting edge. “We take it to another level in cat modelling,” he says. “We don’t just tell a company its PML, we look at its overall cat risks and how it can better manage its exposures.”

And while it succeeded in surviving and competing with the bigger players on technical fronts, it also succeeded in other ways. Right at the start, Fox said the business identified 25 clients it wanted to work with. These were all major buyers of reinsurance but often with sophisticated and complex needs that the TigerRisk partners believed were not being well served by their current brokers. Today, it works with more than half of those.

Fox says the process was not easy initially. As a start-up, many were initially wary of putting too much faith in a very new player, regardless of the experience of the founders and the team. He found the first year frustrating in this sense. But as the company has grown and matured, clients have been more willing to put ever greater chunks of their programmes through TigerRisk.

“In the first year especially, we were a little naive. We thought that since we had talented people, the business would just flow. But as a brand new entity we were seen as a risk. We picked up bits and pieces but not to the extent I expected. But as time has gone on, that has changed. We are picking up whole programmes now.”

Fox says that reinsurers have been very supportive of TigerRisk’s clients. “It is clear that reinsurers also want more distribution other than just from the big three. Our clients have received outstanding capacity from all the reinsurers. The notion that larger brokers can drive better terms for their clients is simply not true. We track this very closely.” He believes reinsurers appreciate the creative solutions that TigerRisk brings to its clients and want to be part of an evolving market.

The best from the best

TigerRisk’s growth dynamic has also been key in the way the company has attracted new people to work for it. It now has some 65 staff now including 19 partners in the business. The partners it has made in particular are each experts in their fields and they have been enticed to work for TigerRisk, usually from one of the bigger players.

He cites two reasons TigerRisk has proved so attractive to other brokers. Some become dissatisfied working within larger corporates where they often find themselves increasingly dragged into politics or managerial functions as opposed to dealing with clients and doing what they enjoy.

Secondly, the ownership structure of TigerRisk means it can offer potentially very healthy rewards for those who join. TigerRisk is privately owned with Fox and Stanard as the main shareholders while a small equity stake is also held by Aquiline Capital Partners, a New York-based private equity firm which boasts as its chief executive Jeff Greenberg, the former Marsh & McLennan boss.