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Aspen Insurance Holdings Limited (NYSE:AHL)

Morgan Stanley Financials Conference Call

June 12, 2013 10:20 am ET


Christopher O'Kane – Chief Executive Officer


Greg W. Locraft – Morgan Stanley & Co. LLC

Greg W. Locraft – Morgan Stanley & Co. LLC

Okay. Next up in the property, casualty space is Aspen Holdings, and we’re pleased to have the – one of the founders with us, the Chief Executive Officer, Chris O'Kane, to my left. He’s been in the industry for a long, long time, 30 years plus, was with the Wellington Syndicate before that, and again, he is the Founder of the business, founded it over 10 years ago, in 2002, in the teeth of the last hard market. With him as well is the new Chief Financial Officer, John Worth, who came from Barclays and E&Y and some other places as well before, but he is new to the role, so hopefully we’ll learn a bit more from him and about him.

So the format here is going to be standard presentation and then, Chris would like to do some Q&A here in the room as well for those that are interested. We do have time allocated for a breakout in MetroWest following as well for any spill over there, but let’s start with the formal presentation and then we’ll go into Q&A here in the room. Chris?

Christopher O'Kane

Well, thanks, Greg, for that introduction. I do not feel like an ancient veteran standing here, but I can just about get myself up in front of the podium. I think one of these about insurers, I know one or two in the room, we’ve met before, but the majority are unfamiliar faces. So let me start, I think insurance as a business from the outside seems terribly dull, nothing ever happens. From my 30 plus years in the business, I’d say finding a week were nothing interesting happens is a pretty rare thing. We are constantly faced with all kinds of challenges, all sorts of things. We are sensitive to interest rates. We are sensitive to earthquakes and hurricanes. Capital in can really depress pricing. Capital out can cause us to increase pricing. When we increase pricing sometimes, like when Aspen was founded 2001-2002 time period, you can increase prices by a factor of 50%, 60%. The business obviously is responsible for increase in premium by about a factor of three, $600 million to $2 billion in the 2001-2003 period, so this is a business, if you pick your moments, grab the opportunities, you really can create some very considerable value.

To do that, you have to be running the right sort of business. It has to be a business that’s specialty in nature, by which I mean, you need to be able to judge risk, judge when you want to take it, judge when you want to decline it, you need to know how to price it, you need to be responsive to clients’ needs and requests. There is no room in the specialty insurance, and reinsurance world for the complete cat approach. There are very few standardized solutions. So our endeavor in Aspen is to create a community of intelligent, like-minded professionals, who has got a kick of solving insurance and reinsurance problems, that’s what we do, and that equips us to be reactive, responsive, agile. We’ve used words like agile and nimble on our history is kind of grabbing opportunity, rejecting opportunity whenever is get to a bit sale.

Let me now take you back to, it’s a little bit of background on the beginning of this year, see if I can actually press the right button here. Some interesting words, I guess, you should all read and absorb. So amplifying a little what I’ve been saying deep underwriting expertise to understanding client needs and risks. And the risks that we write include many exotic classes; financial and political risk in Russia, corporate financiers, lending project finance, and worried that the Russians in someway will not confirm behave unexpectedly. That’s a difficult and dangerous area and we’re careful in way we do. We happen to be very good at it. We do about $50 million to $60 million of premium in that. Piracy, kidnap and ransom, if you happen to be a wealthy family in Latin America, there is a very good chance sooner or later, you’re going to get tapped on the shoulder, a gun pointed at you, you’re going to get kidnapped or your kids will.

Our business is to advice you how to minimize that happening and how to get your family back when it happens. We also deal with corporate side of that where essentially anyone from an American company or European news agency, traveling (inaudible) will just might just disappear and be held for ransom, our job again, how do we minimize the chance of that happening, so even it happens, how do we pay that ransom. Piracy, some earlier, that didn’t exist as a problem four years ago, we discovered it as kind of an opportunity.

We went in a couple of years from writing $0 to about $55 million of premium with the best returns on capital what we’ve seen in history of Aspen over the last few years in that business. That’s what I mean by deep underwriting expertise, the skills to react to the unusual situation and the agility, the speed of maneuver to grab the advantage. I go back to that piracy business, it was great. It was fabulous. Previously and often in various earnings calls I told you that it was a good business because it was kind of influencing our numbers, people listen, and now everybody thinks it’s a good business.

I don’t think it’s such a good business anymore, there is too much competition there, so we’re kind of getting back out of that again, we can still do some of it. That’s a very Aspen approach; pick your place, pick your moment, pick your timing, go from the maximum value equation and when that’s over, go and do something else, and if you can’t do something else, another part of our DNA is return capital to shareholders.

The next point here is executing plans to achieve a 10% operating ROE in 2014, and we should pay some attention, but not too much attention to what analyst think about us and probably there aren’t too many boards – there aren’t too many CEOs who feel that if their internal forecast isn’t a little bit better than analyst consensus, that’s not a good thing. We ought to be close, but we will like it if the chance of a beat is slightly better than chance of a miss. But what we noticed in the course of last year was the gap between what the analyst community thought we can do as a business and what we actually thought we really could do as a business, became greater and greater. When it got to like a 20% to 30% differential, we thought we can – maybe we actually have to interfere. We have to guide them. It’s one thing to have different suggestion, but it’s another thing, which we would not do to corporate in this leading market.

So very much to John Worth, our CFO, about six months standing in that, as said, we need some of our guidance, just to give a simple number 10. That’s the ROE we think we can do in 2014. That’s what we are setting our goal sights in doing. At the time, we said I think analyst consensus was rather ranges like 5, 6, 7, now it’s probably 8ish, 7.5, 8, there’s a wide diversion there. So we haven’t actually closed that gap completely, but in causes to do that, we had to think what is it that the analyst community is maybe not seeing that we are seeing?

One was business optimization. We don’t talk as much about this as perhaps we ought to, but it’s very important to us annually, maybe more frequently than that to look at every line of business we are in. So if we weren’t already in there, would we get in? The opportunity once saw, do we still see it, the hopes that we had for it, is it realizing those hopes, sometimes you have great idea and it just doesn’t work out. You give it a year, you give it two, it still doesn’t work out, well, maybe it’s going to work out one day or maybe you just better give up and go and do something easier to execute. So that’s kind of self examination gives on all the time.

We in the course of later part of last year and beginning this year, went through it again and that caused us really downsize, very dramatically downsize a line that we’ve been in about 10 years, which was open market property insurance in United States so-called E&S property, that’s driven by catastrophe pedals. A lot of volatility there, which we always knew, same with our property cat reinsurance, lot of volatility. Differences with property cat reinsurance if it goes wrong, which it does every three, four years, you get your money back in by the year or two and with the E&S insurance stuff, if it goes wrong, which it goes wrong by same frequency, it takes about six years to get your money back. Well, one business is better than the other and now we’re putting our capital in the better business and we are getting out of that.

Capital efficiency, very sensible reason for all our losses in 2011, we didn’t do many share buybacks that year. We spent 2012 watching our capital buffer growth, and by the end of 2012, we thought we’re a little overcapitalized or even a lot overcapitalized, and then Sandy happened. None of us felt that we wanted to be in the market buying back shares when we didn’t know the size of the Sandy and more importantly, price. We knew more than investors did, so it would have been asymmetric informations and although we’ve been staying out of the market. But as soon as we felt that Sandy was countrified, we entered into market and we announced earlier this year, $500 million share repurchase authorization.

We expect to buyback about $300 million. Our market cap in the region of $3.5 billion, $300 million this year and another $200 million next year, these are not small numbers. As a percentage of the value of the company being bought back, it’s pretty meaningful and if you’re thinking about E that is moving the E, which constantly changes the ROE, one of the things that makes us confident saying, we can do 10, we wouldn’t do 10 if we were already capitalized, maybe the analyst were assuming at one phase less (inaudible) buyback pattern than we were.

The third thing you have to think about today is the investment return. While at peak, say, six years ago, I think we were investing new money at about 485 basis points. Those were the days. Today, new money gets invested about 100 basis, 125 basis. Our portfolio yield is somewhere in the sort of 250 basis points area, and so the contribution, very important to the insurance company model, the contribution from investment income. Historically, that would be perhaps 60% of earnings for a typical insurance or reinsurance, in some cases, it’s more. Well, at those kinds of yields, that’s not working. We are looking at how we can enhance investment return. Some of it frankly will actually simply avoid a further reduction in investment income rather than absolutely increasing it, but we are looking at lower grade corporates, we are looking at equities, increasing exposure to equities, and I’ll come back to that later.

So who are – who we are, you maybe wondering after five or 10 minutes of speaking, who is this guy and what it’s about, Bermuda-domiciled specialty insurer and reinsurer, we wrote about 2.6 billion of gross return premium last year; this year it’s going to be, that sort of figure, maybe a little more, industry-leading underwriting expertise. I don’t like boasting. So I feel (inaudible) these words, but honestly for 11 years, this one thing we’ve looked at in our underwriting team leaders and our underwriters and the way we train them and the way we equip them is are you guys capable of approaching a world of complex risk and seeing something others don’t see and saying something interesting about it and taking some decisions that are helpful to brokers and helpful to clients in terms of package and structuring that risk profitably for us, but additionally for them. And if we don’t find underwriters who’ve got that mentality, they don’t belong in Aspen. We don’t hire them.

In case when we have hired such people, and they had to leave Aspen because they don’t fit in. If you pause and we do obviously, we ask our brokers, we ask our clients, we get objective market research and ourselves we are always recognized with this ingenuity, this expertise, this willingness to solve problems and good service standards too. The business is split between insurance and reinsurance. Historically, we were heavily reinsurance dominated and heavily property dominated. There is no, in my opinion, ideal blend between insurance and reinsurance and between property and casualty. I think you have to look at the cycle. You have to look at where opportunities are and you have to favor the segment or sector where you see more opportunity over the one where you don’t, but just today, we are a little bit more insurance than reinsurance. It’s kind of just sort of 52% insurance what we expect to do this year.

Main offices are New York for U.S. insurance and Hartford for U.S. reinsurance, Bermuda for international and U.S. cat reinsurance principally, and then London for a range of London market Lloyd’s style specialty insurance products. We operate in the London company market. We’re also very successful syndicate at Lloyd’s of London. Broker concentration, an issue for everybody these days, Aon and Marsh are good firms, successful firms, but aggressive firms and growing very well, and we traded with them. We traded with them happily and successfully, but we prefer to deal with smaller firms. So I look at that and every year I see the Marsh, Aon concentration increase, I’m unhappy, and if I see it reduce, because we find more specialists for small firms with a hold on interesting niche-type books of business. That’s where we want to play. And we are competitive to our peers, somewhat less dependent on major brokers than others, and I feel good about that.

Reinsurance is the older business compared to insurance. We have been for 10 or 11 years. We’re leader in property catastrophe reinsurance. Those of you who understand that business will know that for many specialty insurers and reinsurers, especially reinsurers, prop cats really juices the result more than anything else. It’s volatile, but generally there is a lot of fear about it. There is a lot of research. The models are imperfect. I have to tell you that cat models are imperfect. I think they are less imperfect than they used to be and they are more robust than a lot of other insurance pricing models, and that produces the kind of foundation you follow in pricing.

When I started in the business, people didn’t know how to price cat risk, and so a lot of people sold it cheap without knowing that we are doing. Today, there is no excuse for selling it cheap, so very, very few people do. Question is can we carry on selling, is it expensive as we have been. There is a lot of interest in this sector from new capital, principally its pension fund money and hedge fund money, looking at a business that is from their point of view non-correlating or very lowly correlating.

And looking into business where Aspen has produced throughout history about a 14% return on allocated capital. There are some people who produce more risk who’ve done better where others are doing a little bit less, but it’s been the last 10 or 11 years well into the double-digit return on equity despite some of the biggest catastrophe events that we’ve ever seen; the Tōhoku Japanese quake Katrina, Rita and Wilma three major events in 2005, in spite of that, it has been a great business.

Well, this new money is looking at that and saying, we might work for 8% ROE or 7% or even 5%, and if you get cheaper capital, which by the way is entirely rational capital, is no one is foolish here. They are simply saying for non-correlation, a 7% looks like a pretty good return co-existing with a 12%, 14%, 15%, who is going to win, well, I think the cheaper capital is going to win, and that’s why we have founded Aspen Capital Markets, which is essentially an endeavor to turn part of our catastrophe reinsurance expertise into asset management. Its early days, the team’s being, still being hired actually, but some are on board and working hard and we will be using our position, our brand, our knowledge, our dexterity in applying these models, which can never be mechanical, it always has to be thoughtful and judgmental.

On behalf of other capital, some of our own, some of the others and we will see our business become partly an underwriting business where we’re taking underwriting risk and roll it that way, and partly it will be a fee and commission-based business. It may be that this new capital seeks out other reinsurance, the other property, the risk it has for facultative, casualty and specialty, a lot of bright people are thinking about that, but so far little progressed made. From our point of view, what you – you see the pie chart, so each one, 20% to 27%, 21% to 22%, they’re roughly equal in size.

Specialty is interesting, kind of close to my heart. It’s the real home of the most unusual risk. We do credit insurance, we do agriculture, we do a lot of interesting things in the aviation, satellite area, we do some personal accident, we do some war, we do some nuclear covers, it’s hard to categorize. It is a kind of miscellaneous bucket, but we have some people in our London operation, who spend their careers understanding risk and specialty REIT it has been the most successful. Prop cat REIT is great, but actually specialty REIT has outperformed it almost every year. We love our specialty REIT guys.

I’ll give you a look at our insurance business next. We operate in the U.S. as an admissive carrier and as an E&S carrier. We operate in London as a company market and as a Lloyd’s syndicate. Wherever we operate, we also sell some insurance by Dublin, by Zurich, by Bermuda. We always have that specialty field. There has to be something special about the risk, something where smart people can actually get paid for being smart. That’s the key to specialty and it runs across. So we think about our business as marine, energy, transportation, construction would be in there too. Very classic London market Lloyd's type business.

Yes, you can find exposures to deepwater horizon in the Gulf, relatively small exposure for us, but it could have been larger. There is danger in this, but we find it’s often the case, where there’s a lot of danger, there’s a lot of need to buy insurance and where there’s a lot of need to buy the insurance or reinsurance, you can get a better price. So with the danger comes the reward, makes it a lumpy sort of business, but we are very good at it. We like that segment.

Financial and professional lines has been growing for us. It’s one – it’s young, where is the – we’ve been doing the marine, energy, transport stuff about 10 years, it’s been probably four, five – about four years we’ve been doing it properly, rapid growth area. You need to be smart, so a lot of competition I would say particularly in the management liability field and that’s probably the one of the smallest elements there.

I already mentioned something like kidnap and ransom. I’d also maybe mentioned technology liability, which you hear these days in school cybers horrifying, terrifying, the – is somebody, most of the hackers tend to be Chinese as it happens. We monitor as an organization how many attempts to penetrate our file will happen in a month. A lot more than I’d expected it, non-successful at least to say, more than half from China. I’m amazed to come to know Aspen is an essence of target. I think they want our software and hardware rather than our hacking expertise, but a lot of people are finding that and still we’re devising insurance solutions. We’re assessing the risk for technology and we are kind of saying we can insure some of that for you and it’s a growth area. Again, I don’t deny it’s a dangerous, but we do, well, we do carefully. We watch our line size. We buy reinsurance ourselves when we write the insurance, so the net exposure is relatively modest.

Property is not much to say, we are running down the U.S. property, we’ll stay in U.S. property on a program basis, not so much E&S. We also have a very successful UK property operation. Casualty insurance lines pretty challenged these days. Of all things on the face, that’s the one to look at more carefully not because the underwriting, it’s probably because the investment return contribution on casualty side is absolutely critical and that investment return is still low. And what the market has not done and this has not been successful in saying, because we are not making enough money on the investment side, we need to charge you a lot more money on the underwriting side, it just hasn’t really happened.

So casualty is probably the weakest of the five segments. It still is a very important segment. As you know, in the world of P&C in the U.S., the C is generally 55%, 60%, 65%, P is much smaller. So we can’t afford to ignore it, but we take some very, very specialized purchase, and we are not all things all knows by the (inaudible). Program business, it is what it says, where we find a cluster risk and manager we like, we’ll back them with our capital and they will produce business for us. We’ve got some people, who have been doing that for about 25, 30 years in different organizations about the last five or six, they got a great track record and that’s also a growth area for us.

First quarter highlights are always a record, I don’t want to delve on that. I think the final point I would make is with Aspen I think what we’re offering is an intelligent risk managed approach to underwriting specialty risk. We will never claim to offer you the highest ROE you can find. We will claim to offer you a more stable, a less volatile ROE that we’ve succeeded in doing, and I’m going to pause there and just remind you that over 10 years, we had some good times and some very bad times. We’ve grown combined with CAGR 10.8% I think is a pretty reasonable outcome. We’d like to keep that ROE going more or less in the directions going and more or less at the pace it’s going, and that’s what John and I and the entire team are committed to do. Sorry, Greg, probably we went on a minute or two longer than we hope, but I’ll stop there.

Question-and-Answer Session

Greg W. Locraft – Morgan Stanley & Co. LLC

Great. So let’s do some Q&A here and any spillover we’ll take to the MetroWest. So we have microphones. Raise your hand if you have a question. I guess, I’ll kick it off with, I don’t officially cover you, so I will take the consensus earnings estimate on 2014…

Christopher O'Kane

You’re welcome to start anytime, however. We have no reservations about it.

Greg W. Locraft – Morgan Stanley & Co. LLC

These are not my numbers. These are my competitor’s numbers. Consensus has an ROE below 10, your goal was at 10, so what is the disconnect and where are my competitor’s models wrong?

Christopher O'Kane

John, would you like to take, it’s a good step any question, okay.

John Worth

Well, thanks for that, I mean it’s a fair question. As Chris was saying, we’ve recognized this disconnect for sometime now, which is why we’ve been clever on the guidance that we’ve given of 10%, and disconnect I think is closing. It’s closed and it’s closed because of the clear guidance we’ve given in the spec that we’re taking to get to 10%. Why is it still less, because it’s for 2014, it’s not 2013, and we’ve got to deliver and we’ve got to deliver against the actions that we said that we put in order to get to the 10%, that’s reducing capital. It looking carefully at the lines of business and making sure that all of those lines of business fall on every cylinder.

Christopher O'Kane

So, let me just, if I could just briefly add, so I think there isn’t one big thing, it’s lot of little things and they don’t – they didn’t know when it’s really – how significantly large share buyback plans are and even I guess when we said it, we didn’t know we’d really do it and we are executing that quite rapidly.

But another thing and I just put this up for that reason is loss ratios. We actually have some of the best loss ratios in the industry. We tend to be in almost every line, top quartile if not actually the best of the peers. This illustrates us over time. Five-year average loss ratio is 69.5%, peers is 70.5%. I think a lot of the models just presume an industry average loss ratio. They are not giving us any credit, what I would see is a long proven track record of loss ratios and you get a lot of it just in that factored in.

Greg W. Locraft – Morgan Stanley & Co. LLC

Okay. So it sounds like their share count might be a bit too high, because you guys are executing – you are executing on the buyback which you very clearly articulated. And then it sounds like their combined ratios might be as well too high relative to what you guys think you can do?

Christopher O'Kane

Yeah, particularly, if I was going to decompose their model.

Greg W. Locraft – Morgan Stanley & Co. LLC

Okay, I mean, and then it’s probably not interest rates. It’s probably not their investment income assumption or anything like that?

John Worth

I think you can take on the two main ones.

Greg W. Locraft – Morgan Stanley & Co. LLC


John Worth


Greg W. Locraft – Morgan Stanley & Co. LLC

Okay. Great. Questions from the audience. Second one from me really is maybe for – actually it’s for both of you. Chris, why did you hire John, and John why did you take the job?

Christopher O'Kane

Well, if I go first, we’ve – John is the third CFO we’ve had in our history. And the first guy was intensely bright. I loved him a lot. But he didn’t build great systems. He wasn’t really into infrastructure. The second guy came from RBS and talked a lot about management of the infrastructure, but was less of an accountant, less and sizable as a financial mind. So my third go at hiring CFO, so again, it’s not enough to be good at one or the other, you need to excel in both.

And John, I don’t know, convinced me, proved me, whatever role that he was the guy who actually got the technical side and got the organizational side and is running a finance function, it’s one of our biggest areas of execution. It’s a manageable business like any other, but having the acumen to understand capital issues, balance sheet issues, earnings issues, tax risk, all of those things, they are more steeper side of it, I thought John had both his qualities in abundance.

John Worth

When I look at Aspen and I was approached by another (inaudible) group financial controller of Barclays, it was kind of not an immediate spec. I then looked at the company and I did a lot of due diligence informally around the group contingents is then consultants and analysts of those that U.S., and checks out as a company that was very well respected, very professional in its approach, well capitalized and governed with good feedback from the rating agencies. And I can see that there was a way that I could add value, because clearly there’s a lot of relevant experience as well as learning, so it’s like a good fit in, I think so far that’s proved to be the case.

Greg W. Locraft – Morgan Stanley & Co. LLC

Great. Okay. Last big one for me maybe – this one maybe, any questions from the audience. I’ll squeeze one in, we do everyone, so…

Unidentified Analyst

Lead time for you Greg, I was struck by your comments about how you manage your broker relationships. And I wonder if you could expand on how you’re targeting smaller brokers a little bit more? And then secondly, related to that getting into the capital markets business, how that might change or influence some of your broker relationships?

Christopher O'Kane

And the clock says 41 sections and we could spend an hour in those sections and not view that…

Greg W. Locraft – Morgan Stanley & Co. LLC

Actually, you have five minutes beyond that.

Christopher O'Kane


Greg W. Locraft – Morgan Stanley & Co. LLC

So you can.

Christopher O'Kane

So broker relations, we are a broker market almost 98, 99, but we do small brokers the brokers, the brokers are our customers, they got to be in business sense friends, we got to mention. But we also got to recognize that they have different ambitions for us. And as regards the big two Aon and Marsh, they truly is not to us as a market, it’s to their clients. And so they’re always looking ways to expand form and reduce price and they cannot do that, it is what they are paid to do. But they have a disproportionate amount of muscle in a lot of great business. Some of the historic Marsh accounts are just terrific and we are very pleased beyond them.

Aon has an amazing distribution, unviable around the world, of course, we want to see it. But when we’re dealing with them, we’re a $2 billion, $3 billion market cap company, they are not, and the par exchange is a little bit in their favor. That’s why I think, it’s kind of a relationship with respect with Berkshire, Willis there somewhat smaller similar to Marsh and Aon, but they are probably a little less extreme in that one. But then in the rest of the world, who are those brokers are not dominant and they are people who actually, and for whatever reason, we think capital business is perfect. We think the competition gets everywhere, it just doesn’t.

If you go around America, particularly away from New York and maybe away from Chicago, you just find books to business, agents and everybody is happy, it’s kind of got a different feel and if you can say the same quality that you’re insurer has offered you of continuity, stability, responsible pricing, good claim service, we’re the kind of guys who would offer that. You don’t go and say, we want to be cheaper replacers, you say to the broker when you stumble with your existing carrier, give Aspen a chance and it’s a slow approach, but it’s an approach that’s working.

Some of these specialty brokers that I mentioned piracy was just fantastic opportunity. But the main producer of that is the broker no one in this room will have heard of and I haven’t until about two or four years ago, there are in the part of Newcastle in North England. I didn’t even know there were international brokers in Newcastle. We find these guys. We find their group. They know what they are doing. They have the rights. In that business, military connections matter, and these guys have those connections.

So it’s kind of some of it also like serendipity, but mostly it’s kind of that search for the unusual. Now, that broker distribution cap – just remind me the other part of your question.

Unidentified Analyst

Your capital markets business, so if that has any potential to change some of these broker relationships given there are some already up there?

Christopher O'Kane

I think you got to view convergence as an opportunity and a threat. It’s more obvious why it’s a threat and the reinsurance brokers I would say are absolutely in the lead of being fearful that they will be disintermediated. If they are disintermediated, the broker markets such as Aspen, will not have a distribution angle. If they are on Benfield, this Guy Carpenter are in the business of finding insurance companies around the world and providing solutions by the traditional insurance market then we lose out.

So we don’t want that to happen, but I would think they would say it as a threat. They are working to mitigate that threat and we will work with them to help them mitigate it. But we also need additional approach, which says if our clients want to access direct, if our clients want to approach us by investment bankers, or any other route, we need to be open and Aspen Capital Markets will be an equal opportunity underwriter. We’ll be looking at the deal rather than the transmission mechanism of the deal.

John Worth

I don’t think that proves a threat and you need to think about reinsurance and insurance differently. This is a reinsurance and not an insurance phenomenon. And on the reinsurance side I think you have to think about it. If Aspen was trying to destroy a broker position, then we would be vulnerable, we would be attacked. We are actually getting the brokers who are seriously defending a position that we have and probably helping them to defend a position they have by broadening our products offering.

So I think for once, notwithstanding what I said about, it can be tough to work. These big guys in this case, I think the reason London seems okay. The threats, if you want to put the threat is, all the biggest customers have the biggest risk, who want to access capital markets, how many stages in the chain does it need to be between the source of the risk and the provider of capital solution, maybe if somebody who understands matches with, but maybe there are too many people in the chain right now.

Greg W. Locraft – Morgan Stanley & Co. LLC

Great. Let’s pause there. We’ll do the one-on-one, I’m sorry, the breakout in MetroWest. Well, I want to get Chris’s take on Lloyd’s and what’s happening with Berkshire, some Berkshire’s deals are high interest rates, pricing, et cetera. So we’ll cover all that over there on that room. So thanks, guys.

Christopher O'Kane

Okay. Thank you.

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