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investment income, we have delivered that 15% hurdle return as an insurance company, a reinsurance company and as a capital group.” For Mr Weatherstone, it proves the value of diversification. He’s happy with Arch’s product mix here, but says it is at different levels of maturity. The company is still working on plans for property business, but the portfolio will be tilted from the large account space towards the SME market. Arch is also looking to improve its brand recognition. Mr Weatherstone says in some ways the company has “grown by stealth” into a group with an $US8 billion market capitalisation, with some of the best ratings in the business. This has come through solid management, “by doing what you say you will do”, cycle management, underwriting for profit rather than premium and not being afraid to walk away from underpriced business. “It’s just good execution.” He describes the Australian broker market here as very efficient – “the brokers do an excellent job” – that translates across the world. So what is he looking for from the Australian operation in a year’s time? “A business that makes a pretty good underwriting margin, that is still evolving. That is a pretty good outcome for me – and a business that people want to come and work for.” Mr Weatherstone entered the industry from university and says insurance wasn’t highly regarded as a rewarding career then, but it hasn’t disappointed him. Young people now seek out careers in insurance, possibly because of the banks’ activities during the global financial crisis. “When I started it was seen as the backwater career in financial services. It’s no longer that.” What keeps him in the industry? “The people; the friendships I have made.” The group will consider further acquisitions here but is not actively looking. And Mr Weatherstone says the right targets are hard to find. Potential candidates must have a track record of underwriting profitability, but culture is the key – finding people on the same wavelength as Arch, with a high degree of underwriting integrity. He says these are early days, but Resource Underwriting and what was a small existing Arch operation are coming together, and * the momentum is positive. August/September 2015

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Profile for Insurance News (the magazine)

AUG/SEP 2015 - Insurance News (the magazine)  

Why did Warren Buffett, a visionary investor with a famous instinct for business advantage, do a “hands-off” deal with IAG that he admits h...

AUG/SEP 2015 - Insurance News (the magazine)  

Why did Warren Buffett, a visionary investor with a famous instinct for business advantage, do a “hands-off” deal with IAG that he admits h...