The growing concentration of power among the ‘Big Three’ brokers is not beneficial for the industry, Rod Fox, TigerRisk’s CEO, tells intelligent insurer.
When industry veterans Jim Stanard and Rod Fox founded reinsurance broker TigerRisk, naysayers gave the company less than a year to survive. This summer TigerRisk is celebrating its fifth anniversary. And more than just surviving, TigerRisk is thriving, now ranked seventh among reinsurance brokers.
What’s the secret of its success? “Simple,” says CEO Rod Fox. “The market doesn’t need less distribution. It needs more. In fact it’s demanding more. “Insurers and reinsurers don’t want less creativity and innovation, they wanmore. They don’t want off-the-shelf products, they want customised solutions that fit their unique needs. After all, what’s the point of having a broker?”
With 75 to 85 percent of premium volume flowing though just three very large reinsurance brokers, Fox says lack of competition means that client needs are taking a back seat. Case in point: Aon’s deal with Berkshire Hathaway, in which the reinsurer is said to be taking a 7.5 percent share of all of Aon’s subscription business running through Lloyd’s.