Insurance industry executive Brian Duperreault has a new challenge. After an acclaimed career spanning time at American International Group Inc., Ace Ltd. and Marsh & McLennan Cos. Inc., last year with hedge fund partner Two Sigma Investments L.L.C. he formed Hamilton Insurance Group in Bermuda, which is based on the reinsurance business of the former SAC Re Ltd. acquired by Hamilton in December. His ambitious plans for Hamilton include expanding in the U.S. and building a presence at Lloyd's of London. Mr. Duperreault recently spoke with Business Insurance Editor Gavin Souter. Edited excerpts follow.
Q: Clearly there's a lot of capital that's interested in the insurance and reinsurance markets. What makes Hamilton different?
A: Customers are asking that question, brokers are asking that question, and I think you do need to have some differentiation. You have to think about it in terms of carving out a reason for your company to be chosen to be a partner, and in our case we have, I think, several things going for us. One, we have a very good team. And that still matters in this business. Decisions are made for a variety of reasons, but one of them is that both sides like to do business with each other. I think we have, in our case, people who are sought after.
And we have a great investment partner in Two Sigma, so our ability to make money is enhanced because the investment side is quite good.
Lastly, and I think ultimately most importantly, our investment partner is also our technology partner, and they are very good at what they do. What I would like to do is take that technology partnership and see if we can further the science of underwriting in our business. Move it along particularly in the commercial space using their technology and capabilities married with our own skill sets. Ultimately, I think that will make the difference in our company.
Q: What sort of technology are you talking about?
A: I guess the buzz words today are “big data,” right? So use of data in everything — it's touching everything we do from buying airline tickets, to buying insurance, to buying stock.
If you look at that evolution, it's gotten deeper embedded in other industries and less so in our business, but I think there's certainly the possibility that more could be done with big data than is being done. It's a situation where you have to experiment, and I'm not sure which experiments are going to give us the best results. We're going to try different places, different things, different lines of business and different geographies, and we'll see where we go with it.
I think it's more likely to be in the insurance world (rather than reinsurance), and we need some capabilities first, so we're getting a U.S. operation up and running and getting into Lloyd's.
We're in the process of acquiring a shell company in the U.S., putting the technology in that we believe would yield good results.
Q: And in Lloyd's, are you looking for an acquisition?
A: My preference would be an acquisition, given all that goes into starting an operation from scratch in Lloyd's. If I could speed up that time frame with an acquisition, I would, but I'm not dependent on that.
Q: The SAC Re purchase came about through regulatory circumstances that were related to the owner. Was the book of business problematic?
A: Oh no, the company was well-run with great people in the company.
Their portfolio was well-constructed with patience, and its future is ahead of it. It's in great shape, and I'm thankful that the opportunity came along. It was a wonderful opportunity, and they created a good company.