A granular look at underwriting – Fidelis MGU’s Brindle

Freeing up underwriting to allocate more time to crucial decision-making elements was a major theme of a recent Voice of Insurance Podcast, featuring Richard Brindle, CEO of specialty insurance firm Fidelis MGU.

At the start of this year, Fidelis completed a transaction to split its balance sheet – “Project Cooper” – between its own proprietary underwriting on the one hand, and the business it underwrites on behalf of capacity providers on the other, creating a new managing general underwriter, Fidelis MGU.

For Fidelis MGU’s CEO, Richard Brindle – a London market veteran underwriter – this has represented something of a midlife renaissance and a chance to return to what he enjoys best.

“I’ve talked before about the perverse outcome in our industry where the better you are at something in your 20s and 30s, the less you do it in your 40s and above,” Brindle said.

As a result of the split, Brindle has been able to rejoin meetings he was too busy to attend previously when leading the group in its entirety.

“A good example is last week where the kick-off sessions are held with the various lines of business for our 2024 budget, that previously I didn’t have time to attend those meetings. Now I do,” Brindle said.

“We drill down on every line of business, into things like signing ratios, renewal retention ratios, new business flows, not-taken-up stats…slicing and dicing everything we do, talking about the outwards [reinsurance] that we purchase on each line, the relationships, which brokers we should use, that really granular look at underwriting and I’ve never been in those meetings before,” he continued.

The same applies for his right-hand-man, Richard Coulson, Fidelis MGU’s CEO of insurance and UK chief underwriting officer, he noted.

“We’re both in every meeting, we’ve come away with an armful of action points. We’re going to turn those into money; it’s about monetising the fantastic footprint that we built over the last eight years,” he added.

The benefits flow both ways, he emphasised, with junior underwriters able to have closer interaction with the command team, meaning they learn quicker on the job, something that he thinks has been lacking during the era of Coronavirus and remote working.

“You can’t learn the trade from your living room in Clapham; you just can’t. But equally, how much do you learn in a company where you see the C-suite once a year for a drinks reception?” he asked.

Fidelis MGU has a flat structure and working culture, he emphasised.

“None of us have offices, we’re available all the time. I truly believe it is a unique training ground for young underwriters,” Brindle said. “Our underwriters are young, and we make no apology for that.”

Today’s market was made for seasoned underwriters like Brindle. As Mark pointed out, this implies the willingness to move quickly and do deals while others aren’t sure, while giving meaningful support to clients willing to trade on his terms.

 Brindle provided a great example, since reinsurers’ 1/1 imposition of the Russia-Ukraine-Belarus (RUB) marine war risk exclusion. While reinsurers were focused on events in Europe, liquid natural gas shipments between Russia’s Sakhalin Island and Japan were suddenly compromised – an unintended consequence if ever there was one – unless the ships could be insured on a net basis, without reinsurance.

“Why would the Russians interfere with a very lucrative trade, which is Japanese vessels sailing into Sakhalin loading up with LNG, then going to Japan. It’s a short hop, as you can see on the map,” he said.

“Equally, why would Japan mess with it, 9% of Japan’s energy needs come from the Sakhalin LNG trade. There was speculation in December that the lights might be going out in Tokyo in January if they couldn’t solve this insurance problem,” he continued.

Some reinsurers made an exception, with some negotiation, others did not, he noted, while writing the coverage cemented the firm’s reputation for the Japanese client relationships involved.

“We were prepared to take, at least partially, that line, by looking at the actual risk, rather than just simply being a prisoner of what our reinsurance would allow us to do,” he said. “We were happy to step forward, in the old fashioned way, look at the risk, charge a price, do a deal.”