Stephen Catlin is recognised as a leader in the global property/casualty insurance industry. He began his insurance career in 1973 joining BL Evens & Others on Syndicate 264 at Lloyd's. In 1982 he became deputy underwriter, specialising in the excess of loss and energy accounts where he was supported as a market leader. He founded Catlin Underwriting Agencies Limited in 1984, which later became part of Catlin Group Limited. Stephen served as the Catlin Group's Chief Executive throughout its history and also served as the active underwriter of Lloyd's Syndicate 1003 and later Syndicate 2003 until May 2003.
He assumed the position of Executive Deputy Chairman of XL Group plc in May 2015 upon the completion of XL's acquisition of Catlin Group Limited.
From September 1996 to January 2002, he was the Lloyd's nominated Director of Equitas Holdings Limited. He served as Chairman of the Lloyd's Market Association, the trade association representing the interests of Lloyd's underwriters and underwriting agents, from May 2000 until January 2003. He was a member of the Council of Lloyd's from 2002 to 2004 and a member of the Lloyd's Franchise Board from January 2003 until December 2006. He was President of the Insurance Institute of London in 2010-2011.
During his career, Stephen has held a number of important leadership positions within the London insurance market and the international insurance/reinsurance industry. Stephen's career is a case study in leadership and entrepreneurial spirit within the insurance industry
Major Achievements and Contributions
1. The Formation and Sustained Growth of Catlin Group Limited Stephen Catlin's success in business is a result of his determination to 'march to a different drummer' from his peers, creating an independent identity for the Catlin Group ('Catlin'), providing stable capacity for clients backed by superior levels of service, and increasing value for investors.
Stephen established an underwriting agency (Catlin Underwriting Agencies Limited or 'CUAL') at Lloyd's of London in 1984 whose purpose was to manage a new underwriting syndicate, whose active underwriter was Stephen. After working as an underwriter for a Lloyd's agency for more than ten years, he decided he had the talent and vision to set out on his own. This was a major risk for Stephen: Catlin was established with 25,000 pounds of paid-up capital, of which Stephen personally borrowed 15,000 pounds. His salary at the time was only 20,000 pounds per year, and he had a wife and a small child to support.
For the first 15 years of Catlin's existence, the Group conducted business solely at Lloyd's. Stephen's vision and strategy for the Group was constrained by Lloyd's ancient rules and customs. For example, in those days, all underwriting capital for Lloyd's syndicates was furnished by wealthy individuals known as Lloyd's 'Names', rather than corporate or institutional sources. Stephen's first order of business was to convince Names to provide capital to his fledgling business. His reputation as a good underwriter and his personal drive allowed him to attract sufficient capital to launch and subsequently expand his syndicate.
At that time, the main determinant of the success of an underwriting agency at Lloyd's was the judgment of the underwriting team. Under Stephen's leadership Catlin was quickly recognised as an enterprise that stressed long-term, sound underwriting decisions rather than the short-term opportunism widespread at Lloyd's at the time. The Lloyd's market lost billions of dollars during the period between 1988 and 1992, a performance that nearly put Lloyd's out of business after 300 years of operations. Catlin was one of the few syndicates that produced a profit during each of those years. Unlike many of the large syndicates at Lloyd's at that time, Catlin emerged from the 'Reconstruction and Renewal' process unscathed.
Another challenge came in the mid-1990s, during the time in which Lloyd's faced an uncertain future. It was clear that the system under which 'Names' supplied underwriting capital was antiquated, and the doors of Lloyd's were opened to other forms of capital. To continue to trade competitively, Stephen had to attract more capital. His decision was to form a long-term relationship with Western General Insurance Ltd., which was controlled by the Pritzker family of Chicago. This not only provided Catlin with value-based capital support but also supplied with the encouragement to 'build a business for the future'. Western General served as a capital partner to Catlin from the mid-1990s through the Group's IPO in 2004. It was during this period - and with Western General's encouragement - that Stephen began to form the global expansion strategy that has set Catlin apart from most of its peers at Lloyd's.
It was during this time that Stephen realised that the typical Lloyd's operating model - to operate a wholesale insurance business from a single location in London - was flawed. Although at the time Catlin wrote less than US$300 million in annual premium volume, Stephen embarked on a strategy of international expansion. Some critics thought the strategy was purely an ego play. However, the move to expand globally has paid off. Over the past decade, the premium volume underwritten by Catlin has grown at more than a 25% compounded rate, and now more than half of Catlin's premium volume is underwritten outside the London market.
While Stephen has preferred to grow the business organically, in 2006 he seized on an opportunity to acquire a rival that was approximately the same size as Catlin. Wellington Underwriting plc - whilst one of the best known managing agencies operating at Lloyd's - had suffered large losses as a result of Hurricane Katrina the previous year, but Stephen recognised that Wellington's underlying book of business - as well as its talent base - was inherently strong. Again, some critics said that Stephen was biting off more than he could chew. However, the acquisition, completed in December 2006, was a major coup, proving that two people-based businesses can be successfully merged with proper planning, execution and leadership. Importantly, the acquisition provided Catlin with increased scalability, which was crucial to continuing international growth strategy.?
2. Stephen's Business Vision
Stephen Catlin's basic strategy for the Catlin Group over its history has been to 'build a business for the future'. While Catlin's strategy has evolved over the past 30 years due to market conditions and other factors, Stephen's has always sought to think ahead by ten or more years so that the Group consistently is heading in a direction that would provide optimal benefits to investors, clients and employees.
Catlin's current global footprint is the best example of this vision. During the 1990s, Stephen concluded that the operating model followed by most companies trading at Lloyd's of London - to operate a wholesale insurance business from a single location in London - was flawed. Beginning in 1999, Catlin embarked on an international expansion strategy, establishing retail offices during that year in Singapore, Kuala Lumpur, Houston and New Orleans. Catlin's international expansion proceeded slowly. The same year, what is now Catlin Group Limited was domiciled in Bermuda.
The impetus for establishing a new office has usually been the identification of local underwriting staff whose values and ambitions are in parallel with Catlin's. From a single office in London in 1998, the number of Catlin offices grew to five in 2000, 17 in 2005, 51 in 2010 and 56 today. In 2013, 53% of premium volume and 48% of underwriting profits were produced outside of London and the UK.
Catlin's international strategy targets both developed and emerging insurance markets. Operating as a local insurer in mature markets provides Catlin with tremendous growth opportunities due to the sheer size of the demand for insurance in these markets, which include the United States, Canada, EU nations, Australia and Japan. For example, while the premium volume currently underwritten by Catlin at Lloyd's represents more than 7% of the market's total volume, Catlin's market share in the United States is less than 0.5%.
However, even greater opportunities for Catlin exist in markets in which the demand for insurance is not well-developed. These markets include China, Latin America, India and Middle Eastern nations such as Turkey. Catlin currently operates underwriting offices in Hong Kong and Shanghai and has established representative offices in Beijing, Mumbai, Sao Paulo and Bogota.
The opportunities presented by these markets are not merely growth in GDP, but the combination of this growth plus the potential for significantly increased insurance expenditures. As a nation's GDP grows and a middle class emerges, the percentage of GDP spent on insurance rises exponentially. Stephen's vision is for Catlin to be recognised in these markets as a reliable, trustworthy and innovative partner. Often considerable investment is needed before bottom-line results are achieved years later.
China is a good example. When Stephen Catlin first visited businesses in China 20 years ago, he often had to explain what insurance was and make it clear that insurance was not a tax! The Chinese insurance/reinsurance market has grown and matured considerably over the past two decades. When Lloyd's received a licence in China in 2007 to operate Lloyd's China in Shanghai, Catlin was the first Lloyd's insurer to open an office; five years later, Catlin accounts for the majority of Lloyd's China's volume. Catlin's Chinese operations are led by Li Linmao, who was recruited by Stephen as a Chinese university student in 1999 and who worked for Catlin in London for more than seven years before returning to China.
Stephen's interest in - and many trips to - China proved valuable in 2011 when Catlin negotiated a strategic partnership with China Re, a property/casualty reinsurer which is 85% owned by China's Ministry of Finance. Under this partnership, China Re established a syndicate at Lloyd's with an underwriting capacity of 50 million pounds whose sole purpose is to provide whole-account reinsurance support to the Catlin Syndicate, effectively increasing Catlin's capital base. In return, Catlin has managed the syndicate on behalf of China Re. In addition, Catlin and China Re share knowledge of their respective markets, which will benefit both Catlin and China Re, whose stated strategy is to expand its involvement in international as well as domestic reinsurance markets. A group of China Re employees were seconded to Catlin's London office to gain experience working in the Lloyd's market and likewise Catlin employees have work within China Re's operations.
The alliance marked the first time a Chinese entity has made a direct investment in the Lloyd's market, and the partnership has been praised by both the Chairman of Lloyd's and by UK government officials.
This partnership is now entering a new phase. As reported by The Insurance Insider on 30 September 2014, China Re intends launch a full Lloyd's syndicate on 1 January 2015 after receiving in-principle approval from the Lloyd's Franchise Board. Catlin will manage the syndicate on behalf of China Re, the report stated, adding that the syndicate's active underwriter will be a senior Catlin Bermuda underwriter. Alongside the continuation of the whole account quota share support for Catlin, China Re will start to write a number of lines of open market business at Lloyd's.
While global expansion has been integral to Catlin's growth, another example of Stephen's strategic direction was Catlin's acquisition of Wellington Underwriting plc in 2006. Stephen maintains that organic growth is preferable through growth via acquisition. However, there are exceptions to every rule, and the opportunity to acquire Wellington was one of those exceptions. What is notable was not so much the acquisition itself, but the successful integration of the two businesses following the acquisition. For example, on the morning following the closure of the transaction, all of Wellington's more than 150 London-based underwriters arrived at Catlin's office, where they found they already had a desk with a fully functioning PC linked to both Catlin's and Wellington's system and an operating telephone. Within six months, nearly all Catlin and Wellington operations had been successfully integrated, and virtually no business previously underwritten by the two competing companies was lost.
Stephen would be the first to say that Catlin's success is based on the dedication and hard work of the team he has assembled. In building a business for the future, Stephen has stressed the need to hire the highest-quality professionals, both as underwriters but also in support areas such as claims management, actuarial and finance. Just as Catlin must offer a value proposition to clients, Stephen believes that the company much offer a similar value proposition to attract skilled, talented employees.
Stephen has attempted to retain a consistent corporate culture throughout the history of the company. The 'Catlin Culture' is based on five core values which Stephen believes are paramount for an insurance underwriting business: transparency (including open communication), accountability (employees should think and act like owners), teamwork (staff should act in the best interest of the company as a whole, not a division or office), integrity (employees' conduct must reflect the highest ethical standards) and dignity (employees must treat clients, other counterparties and fellow staff fairly and with respect). Stephen has found, when attracting new teams of underwriters in all regions of the world, that high-performing professionals quickly embrace these values, as they are the cornerstone for delivering first-class service. They also respect the fact that Catlin focuses on disciplined underwriting, whereby employees are instructed to seek maximum profits rather than growth for growth's sake. This culture differentiates Catlin from many of its competitors in the insurance industry.
3. Commitment to Communities and Environmental Research
The foundation of the culture that Stephen has embedded within Catlin is based on five core values: transparency, accountability, teamwork, integrity and dignity. Stephen believes that if Catlin employees embrace these values in their daily activities, high-quality and ethical service will result.
Stephen believes that Catlin has a great responsibility to the communities in which its offices are located and, as a global business, to the world as a whole. Catlin takes corporate responsibility seriously, and has implemented a wide variety of initiatives to help improve the world in which we live. These activities are largely focused on the environment, young people and education. Catlin is one of the few insurers to publish a stand-alone corporate responsibility report, which highlights Catlin's activities in the communities in which it operates, as well as its initiatives dealing with clients, employees and the environment.
Stephen believes passionately that the insurance industry should take an active role in helping to learn how our environment is changing. As an insurance and reinsurance company, Catlin is in the business of helping its clients manage all types of risks and threats. While insurers know a great deal about the risks their clients currently face, surprisingly little is known about the risks that future generations may encounter, especially risks emanating from climate change and other changes to our planet.
From 2009-2011, Catlin was the sponsor of the Catlin Arctic Survey, an innovative scientific programme. The Arctic's fragile environment is regarding as a bellwether for climate change and other environmental changes. However, hostile conditions in the Arctic make it extremely difficult for scientists to collect data. The Catlin Arctic Survey facilitated research by teaming scientists with experienced polar explorers and guides accustomed to the harsh climate. These activities included the construction of an 'ice base' located on the floating Arctic sea ice from which data could be easily gathered. While analysis of much of the research conducted by the survey is not yet complete, University of Cambridge scientists have concluded from data collected in 2009 that sea ice loss during Arctic summers is much more rapid than had been previously anticipated.
Catlin currently sponsors another major environment research project, the Catlin Seaview Survey. This programme, which commenced in 2012, is a series of scientific expeditions that encompass the first comprehensive attempt to document the composition and health of the world's coral reefs. The Survey accomplishes this goal by capturing unprecedented 3-D panoramic images of reef systems, which allow scientists to study the reefs no matter where they are based.
Coral habitats, like the Arctic, serve as an early-warning system for significant changes occurring to our oceans. The disappearance of coral reefs could potentially affect the livelihoods of millions of people and have grave consequences for tourism, aquaculture and pharmaceutical research. The Catlin Seaview Survey has been a truly global research project. During 2012, the Survey focused on the Great Barrier Reef off Australia, the world's largest coral reef system. The 2013 Survey explored the myriad coral reefs of the Caribbean and the coral reefs off Bermuda, which is Catlin's headquarters. Activities in 2014 were centred on the 'Coral Triangle' of the Western Pacific Ocean, while the 2015 Survey is scheduled to concentrate on the reefs found in the Indian Ocean and the Red Sea.
4. Insurance Industry Leadership
Stephen believes wholeheartedly that, as the chief executive of a major insurer/reinsurer, he has an obligation to play a leading role to improve and increase the recognition of the insurance industry.
In London, Stephen was invited by Lloyd's to join the Board of Equitas Holdings Limited, the company that assumed the 1992 and prior year liabilities of the Lloyd's market as part of the Reconstruction and Renewal programme.. This was a difficult job as Stephen had to balance the ongoing well-being of the Lloyd's market with the necessity that Equitas be an independent entity whose overriding duties were to policyholders and to the Lloyd's Names whose liabilities Equitas had reinsured.
Following his tenure at Equitas, Stephen served on a variety of Lloyd's related boards, including being chairman of the Lloyd's Market Association as well as a member of the Council of Lloyd's and the Lloyd's Franchise Board. Through his participation in these bodies, Stephen has been an influential voice in the reform of the London marketplace following Reconstruction and Renewal and the September 11 tragedy.
He has also served on committees linked to the wider international insurance industry. He has been a member of the Association of the Rendez-Vous de Septembre for several years and is currently vice chairman of the Association of Bermuda Insurers and Reinsurers.
For more than a decade Stephen has been Chairman of the Sick Children's Trust, a UK charity that provides support and accommodation to families of children receiving extended hospital treatment. He is also a Visiting Fellow at the Oxford University Centre for Corporate Reputation.
Curriculum Vitae
Professional Experience:
- BL Evens & Others/Syndicate 264 at Lloyd's (1973-1984) 1982-1984: Deputy Underwriter
- Catlin Underwriting Agencies Limited/Catlin Group Limited (1984-present) 1984-present: Stephen founded the Catlin Group and served as its sole Chief Executive since 1984
- Other Insurance Industry Roles:
- Non-Executive Director: Equitas Holdings Limited (1996-2002) Stephen served as the Lloyd's-nominated director of the company established to run off the pre-1993 liabilities of the Lloyd's market as part of the Lloyd's Reconstruction and Renewal Programme.
- Chairman: Lloyd's Market Association (2000-2003) Stephen served as chairman of the trade association representing the interests of Lloyd's underwriters and underwriting agents. His tenure coincided with the September 11 tragedy, and Stephen was called upon to defend Lloyd's reputation amid rumours that the claims arising from the terrorist acts could cause some Lloyd's syndicates to fail.
- Member: Lloyd's Chairman's Strategy Group (2001-2002) Stephen served on this committee, which was tasked to suggest major reforms to the Lloyd's market following 9/11 to find ways to transform Lloyd's into a modern, dynamic marketplace that would attract capital providers and policyholders alike. One of the proposals made by this group was the formation of the Lloyd's Franchise Board.
- Member: Council of Lloyd's (2002-2004)
Stephen served as a member of Lloyd's ultimate governance body. - Member: Lloyd's Franchise Board (2003-2006)
Stephen was one of the original members of the board which in 2003 became responsible for the day-to-day operations of the Lloyd's market. - President: Insurance Institute of London (2010-2011)
Stephen headed the body that is responsible for the professional development of members of the insurance industry in the London market. - Member: Association of the Rendez-Vous de September (2012-2014)
Stephen serves on the board that organises the annual gathering of reinsurers, brokers and other professionals in Monte Carlo. - Vice Chairman: Association of Bermuda Insurers and Reinsurers (2014)
Stephen serves on the Board of the organization that represents the public policy interests of Bermuda's international insurers and reinsurers. He is likely become chairman of the ABTIR in the future. - Visiting Fellow: Oxford University Centre of Corporate Reputation Stephen is one of a selected group of business professionals that serve as fellows to the independent research centre within Oxford University's Said Business School that aims to understand how the reputations of corporations and institutions are created, sustained, enhanced, destroyed and rehabilitated.
- Chairman: The Sick Children's Trust (1999-present)
Stephen serves as chairman of the Board of Trustees of this UK charity, which provides accommodation for families with children who require long-term hospitalisation, allowing families to stay close together during troubled times.
Honours/Awards
- Ernst & Young UK Entrepreneur of the Year (2011)
- Lifetime Achievement Award: Reactions Magazine London Market Awards (2014)
- Nominator - Dr Alexander Scott, CEO, Chartered Insurance Institute, London
Seconds:
- Brian Duperreault, CEO of Hamilton Insurance Group
- Alex Moczarski, CEO of Guy Carpenter