# One man's dogged determination

Lancashire Holdings' charismatic chief executive officer Richard Brindle made his name in the market during the first Gulf war. Here, he speaks to Jamie Dunkley about his days at Lloyd's, years out of the spotlight and his current fears for insurers

Lancashire Holdings' Fenchurch Street office says a lot about Richard Brindle's character; a Nintendo Wii in the reception area, a games room for staff, and a watchful Pompey the dog patrolling the floor. This is one chief executive very much doing things his own way.

"This is a very modern company and we're very proud of that," he says. "Lancashire is domiciled in Bermuda, that's our headquarters, but I'm based here. We have about 40 people over there, 30 here and two in Dubai. We use technology much more than our peers and I'm dead keen on things like making sure everybody here is a shareholder. We don't fly first class, we're carbon positive and we don't waste shareholders' funds - we are a moral and ethical business. Too often in insurance these things don't happen."

Dog of war

Mr Brindle initially came to prominence during the first Gulf war while working with former Axis chief executive John Charman at Charman Underwriting Agencies. He was able to take advantage of the market's reluctance to cover ships sailing through the region and reportedly made considerable sums in the process. Together, they also forced Lloyd's to rethink its trading times.

"At the time of the first Gulf War, I was a young man on my way up at Lloyd's, which was a somewhat fossilised institution with more than its fair share of arrogant people. And they often combined arrogance and ignorance to disastrous effect," he recalls. "When Iraq invaded Kuwait, the greater part of the market immediately stampeded to cancel all the war policies for every ship sailing to the gulf. They also stopped any cover for aeroplanes flying to the region. This would have effectively paralysed world trade because nobody would have been able to load oil from the gulf ports and the economic consequences for the world would have been unbelievable.

"I remember going to a meeting of the underwriters and being probably half the age of everybody else there. I just said 'this is madness, you can't do this' and they said 'that's our way'. But some of us decided to buck the trend and took the opportunity to act on the market for what we felt was a fantastic risk, given strong US and Allied military presence in the region at that time. We made a lot of money, but we also gave a lot of continuity to our clients and actually forced Lloyd's to open on the weekend for the first time. For about four or five weeks we made hay until everybody else figured out what we were up to. They all came back in and the opportunity dissipated a little bit."

By the end of the 1990s, following the sale of Charman Underwriting (which reportedly made Mr Brindle £20m) and a desire to try different things - including a stint as executive producer on British film A Kind of Hush - he was prompted to take an extended break from the insurance industry.

"We sold the business in 1998 to Ace, partly because I'd had enough and partly because I just wanted to try something else. So I got involved in a couple of charities, had an unsuccessful foray into the film industry but was then drawn back into insurance by what happened in 2005."

He refers, of course, to the ferocious hurricane Katrina, which ripped through the Gulf of Mexico, causing significant damage to offshore energy installations before the subsequent disastrous and tragic flooding of New Orleans in August of that year.

"A lot of people died because of Katrina and the whole thing was an absolute scandal. But you can't help thinking with the left-hand side of your brain in these situations and I realised it was going to revolutionise the insurance market. There was a big opportunity for us."

The formation of Lancashire Holdings in 2005 surprised many commentators throughout the industry who had expected Mr Brindle to return after the terrorist attacks of 11 September 2001. However, he insists this was simply a few years too early.

"It was too soon after I'd left, I wanted a breather and to do other things. There were some very strong interests in my life, which I'm still maintaining now, and I felt I could do this job better by taking time out. I was a non-executive on the board of Lloyd's syndicate Ascot and was travelling a great deal. Once Katrina happened though, it made me realise that I could come back in and do things in a different, more modern way."

Lancashire underwrites four general categories of risk: property, energy, marine and aviation. While it is predominantly a direct writer, a minority of its premium derives from reinsurance policies.

Throughout its formative years, Lancashire has defied the analysts by taking an alternative approach to business. Indeed, the company's 2007 fourth quarter results reveal that the company made a net income of $390.9m (£198.8m) - returning$339.3m of capital to shareholders. However, Mr Brindle openly admits that when it came to Lancashire's launch, they "didn't get it all right".

"At the time of our initial public offering, we projected writing a substantial amount of marine and energy excess of loss business. We got that one very wrong. Pricing was nowhere near where we expected it to be, so we ended up turning down the vast majority of business we saw."