R. Matthew “Matt” Fairfield, the Founder and CEO of ANV, is the epitome of a global insurance executive. He lives in Spain, runs a company based in the Netherlands, which in turn runs a Lloyd’s syndicate and does extensive business in the U.S. To top it off, ANV’s principal shareholder is a pension fund, based in Ontario, Canada.
How does he pull it off? No problem, a relaxed Fairfield said in the interview that accompanies this article. In fact he’s looking to expand and has a couple of deals in the works; one of which came to fruition shortly after the interview.
On September 17 ANV announced that it has concluded an agreement with Ryan Specialty Group, LLC to combine their Lloyd’s managing agency operations, ANV Syndicate Management Limited (ASML) and Jubilee Managing Agency Limited.
The move is only a part of Fairfield’s dedication to “building our business.” His current projects include “retooling” the Lloyd’s syndicate 1861, which ANV acquired from Flagstone Re in August 2012. “We didn’t buy a shiny new bike,” Fairfield said, but “we’re shining the bike up, and it’s in a lot better shape than when we bought it.”
Fairfield has great faith in Lloyd’s as a wholesale and specialty lines business. “It’s still the premier market in the world. It can’t stand still though,” he said. He pointed out that Lloyd’s now has competition “in Zurich, in Bermuda, in Singapore, and now Doha with the opening of QRe.” Money moves to where it’s needed he explained, but he’s also confident that Lloyd’s will continue to attract its share.
Commenting on the recent deal between Aon and Berkshire Hathaway to pay a percentage on Lloyd’s business, Fairfield acknowledged that it’s an important move, but he pointed out that “it gives Aon that amount of control over that amount of capital vis-à-vis a Lloyd’s platform.” He also sees this as “part of a growing trend” whereby the capital markets provide funds, which are in turn use by distributors, “usually brokers,” to place business.
This increasing presence of alternative or third party capital in the reinsurance markets has generated a lot of comments. Fairfield acknowledged that, after trying for years to interest the capital markets, with their trillions of dollars, to become interested in the re/insurance industry, they have succeeded, but now they’re not too happy about it, as many reinsurers fear the increased competition. He described not all of it as being “intelligent capital,” but, he added, “it’s not going to go away.”
He doesn’t perforce see a great difference in the type of institutional investor, and as ANV’s principle shareholder is a pension fund, he has a good deal of experience in their needs – make a decent return on their investment – and their management. “You match the ultimate capital provider up with the opportunity,” Fairfield said. The difference being that with hedge funds and private equity investors “there’s a bit more arbitrary nature as to how they make their decisions…whereas a pension fund has more flexibility from a timing perspective, and can match up the opportunity to their capital.”
He also stressed that with ANV he’s in for the long haul, and that neither he, nor his investors have plans to grow the business and then sell it off.
Fairfield also contrasted the banking industry, which he described as “broken,” with the insurance industry. The principle difference being our clients “need our products every single year, not on a one-off basis; it’s a very nice product cycle; you’re bringing value every single year in a similar fashion – hoping to adjust to what they need – and it enables commerce.”
That may be a factor in ANV’s plans to expand further in both Asia and South America, where Fairfield doesn’t see the countries in those regions as “emerging economies,” but as “economies that are there right now, where we can do some great business.” He’s not overly worried about the current slowdown in sole emerging markets. On the contrary he sees enhanced “opportunity.”
He also thinks the Reinsurance Rendez-vous is far more useful than in the past, as it enables people from all the sectors of the re/insurance industry to meet and discuss business trends and problems “Right now everyone has to come prepared and ready, because things are changing every day in our business right now.
“We’re at the ‘new-new’, and we don’t know where we’re going if you ask me.” He pointed out that Europe is currently one third of global GDP, while Asia is one sixth. “It roughly flipped in 10 years; so evolving your strategy, your clients and yourself as the capital markets and the capital flows change in those regions, that’s a seismic shift.”