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Richard Watson: “Our sceptics are a negative force who don’t want the competition”

January 6, 2021
Our CEO, Richard Watson, spoke to Insurance Insider at the turn of the year on the reasons behind launching Inigo, his outlook on the market and aspirations for the business.

Inigo took advantage of the upswing in rating momentum and the surging investor interest in (re)insurance to join the “class of 2020” with $800mn of capital to deploy. The acquisition of StarStone underwriting assets from Enstar created the foundations for the Lloyd’s business and made Inigo one of the five entrants to the Lloyd’s market for 2021. However, some in the market have voiced scepticism around how much value the new start-ups will add, and claim their fresh capacity will only serve to dampen the rate momentum which has continued into 2021.

In a wide-ranging and frank interview with this publication, Watson said:

As regards to sceptics – I don’t worry about them. They are a negative force in life. “Most of them simply don’t want any competition. Protectionism, whether you look at countries or markets, doesn’t make them better, it keeps the weak, weaker.

During the interview, Watson went on to outline the reasoning behind his decision to set up in Lloyd’s, his ambitions for a Bermuda platform and congratulated competitor Neil Eckert on his successful Day 1 IPO for start-up Conduit Re.

Inigo has already assembled its top team and a roster of key talent, with Watson’s former Hiscox colleagues Russell Merrett and Stuart Bridges taking on the CUO and CFO roles respectively. Karen Graves was recently revealed as COO, and NatWest chairman Sir Howard Davies has been appointed as chairman. Key underwriting hires include George Stratts as head of first-party business and James Power as head of marine and energy.


Howard Davies, Chairman

Richard Watson, CEO

Russell Merrett, CUO head of reinsurance

Stuart Bridges, CFO

Karen Graves, COO

George Stratts, Head of first party

James Power, Head of marine & energy

Sandy Warne, Head of terrorism/PV

Damien Smith, Senior reinsurance underwriter

Nick Lazarus, Senior reinsurance underwriter

Adam Alvarez, Reinsurance underwriter

Steve Agutter, Head of claims

Yera Pattel, Head of D&O claim

Source: Insurance Insider

I want us to stand for high-calibre underwriting; to be a company that’s fun to work at, and one that attracts very talented individuals,” Watson said. “If we underwrite well, the future is ours to dictate.

Richard Watson
CEO, Inigo insurance

Read the full Q&A with Watson below.

You have previously said Inigo will be a “highly focused” business. Can you elaborate on what those focuses are, including how you expect the insurance/reinsurance business mix to develop?

The business is split between insurance and reinsurance. The reinsurance book is dominated by property and other shorter-tail classes; the insurance book however, is a broader split of larger-ticket property risks, casualty and financial lines, and marine and energy liability.

Choosing the right classes of business to compete in is vital, but so is good individual risk selection. To that end we think it’s important we have the chance to individually assess each risk. Focusing on larger risks, where there is a smaller policy count, means we have time to do this.

The mix of insurance and reinsurance isn’t important. Providing great service, good products and useful capacity to customers and brokers is what matters. The percentage split is a simple reflection of how well we are achieving that in different lines and that’s going to be largely correlated to where we are in the respective market cycles.

We talk about focus a lot. For businesses like ours, good underwriting is the key skill, and the topic that dominates the conversation. In bigger companies, the best people get consumed in endless debates about corporate structure, matrix management, IT renewal, global regulation, strategic reviews etc. Underwriting is what we spend our time thinking about and talking about.

We aren’t trying to be all things to all people, but to compete in areas where our presence is valued, and good underwriters can consistently out-perform.

Sceptics will say that Inigo is a traditional, opportunistic play and doesn’t bring anything new to the Lloyd’s market apart from increased competition. What would you say to those critics?

As regards to sceptics – I don’t worry about them. They are a negative force in life. Most of them simply don’t want any competition. Protectionism, whether you look at countries or markets, doesn’t make them better, it keeps the weak, weaker. I have been hugely encouraged by the letters of support we have received from incumbent carriers and brokers who appreciate the great service, products and capacity that we are looking to bring to the market. For the handful of objectors, and it’s a handful at best, I would respectfully suggest we are not their problem. If they have a problem, it probably lies closer to home.

Are we opportunistic? What does that really mean? We recognise where there are real disruptions in the market. We will work nimbly with brokers to fill the gaps in capacity and leadership as they occur, and don’t enter markets that are over-served and don’t value our capacity. By that definition, all the best underwriting companies are opportunistic.

How will Inigo compete with well-established competitors as it starts its build-out phase?

It’s not all about competing with established markets. We think there are some great underwriting companies out there, and we will look to work alongside them to help deliver the capacity and products the customers want right now. However, all of our teams are leaders in their field, so where it’s appropriate we are happy to work closely with policyholders to understand their business, and provide a competitive option as leaders.

Businesses succeed against their competitors because they have a clear and simple vision, they have fantastic, motivated staff, and the discipline to execute their plan properly. Do that consistently well, and you will inch ahead of your competitors. What a start-up gives you is a clean sheet to allow you to focus on today’s opportunity, to get the right team, and the right systems.

At Inigo we are taking a bet on young talent. We are a business where dynamic young underwriters can accelerate their careers. Smart, dynamic underwriters always find a way to compete.

You effectively had carte blanche in deciding what platform to launch your business on. What made you opt for Lloyd’s when some of the most successful recent launches in London (eg. Convex, Fidelis) have been outside of it?

We chose Lloyd’s for a number of reasons. It remains a great market to trade in. We value the shared services, the reputation, the capital efficiency, the credit rating and the increasing drive for operational efficiency. The breadth and depth of broader services in London, such as legal, accounting, recruitment, etc. makes London and Lloyd’s a compelling combination in my view.

The other key factor was John Neal’s leadership. John has set out a clear agenda and taken responsibility for getting it done and he has earned the market’s respect and support. Some of his predecessors delegated the key initiatives away, to people who couldn’t take the market along with them, but didn’t have the power or the appetite to mandate change. I am behind John and the work he’s doing.

And what are your current plans around the Bermuda launch? And potentially around the US E&S market too?

We want to be a large player in the specialty insurance space, and as such we will likely open in Bermuda at some point in the future. There is some great underwriting talent there and it’s a vibrant market place, but all in good time. Great businesses aren’t grown overnight and our position in Lloyd’s gives us huge potential.

I am personally not overly convinced at this stage about an onshore US presence. I loved working in that market, and it’s such a cool country, but no immediate plans.

Where do you see Inigo in five years? What does an exit look like for you and your investors?

I want us to stand for high calibre underwriting; to be a company that’s fun to work at, and one that attracts very talented individuals.

If we underwrite well, the future is ours to dictate. The IPO market looks better than I had imagined; I think Neil Eckert did something extraordinary, and congratulations to him, so I guess that’s an option in the future, especially if some of our capital wants to take a profit. I confess for now, I am really enjoying life as a private company.

The future will be dictated by our success. If we build a great business, capable of surviving in the long term – talks of exit become almost irrelevant, because we’ll be having way too much fun.

What is your view on Blueprint Two and how will Inigo fit into the Future at Lloyd’s vision?

Smooth, fast, efficient and digital. Common goals for anyone who wants to make buying our product a better more efficient, and indeed more enjoyable experience.

What is your sense on the duration of this current market opportunity in specialty?

I don’t have any more informed view than your readers do. The down cycle has been long and expensive for a lot of carriers, and will likely still have some unaddressed issues in the tail. The environment we are going into is far from certain, whether that’s the economic cloud cast by Covid, the political and legal environment in the US, and the risks posed by changes in employment patterns, income inequality, climate change etc.

I am an optimist in the human race’s ability to adapt and survive, so these are all obstacles we can cope with, but the short term it will lead to instability. I think this is will lead to less irrational competition than we have typically seen in a more stable environment, and an opportunity for the most nimble and informed insurers to prosper for a good few years yet.

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