Profit-focused executives from strong firms who understand the business of underwriting are welcome to enter the excess and surplus lines segment – and that includes Berkshire Hathaway’s Ajit Jain, says E&S veteran William R. Berkley.
Berkley, whose specialty insurance organization now finds itself in competition with Berkshire and an E&S team led by four former executives of American International Group, referred to the upstart at a recent Standard & Poor’s conference in New York.
“Ajit wants to make money,” Berkley said. “He might even be called greedy,” W.R. Berkley Corp.’s chairman and chief executive officer quipped, adding that the new competitor does not concern him.
“I’m not worried about people who want to get into the underwriting business and make profits,” he said of Jain, known for a record of profitability in leading Berkshire Hathaway Reinsurance Group.
Berkley was responding to a question from Kevin Ahearn, S&P managing director and analytical manager, about whether being known as an “underwriting company” provides an advantage to some firms and not others.
“Underwriting strength is the key. It’s why I’m not concerned about Berkshire and Ajit getting into the E&S.”
What does concern Berkley?
“There are marginal firms that either don’t understand their numbers or don’t pay attention. With investment income declining, the period of time [in which] these companies have a window to exist is declining,” he said. In short, “people who don’t care or understand what it is to make money” are a concern, not the members of Berkshire’s group who do focus on profit, Berkley said.
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