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The Once and Future C&F - Fair and Friendly
whole categories of business are considered uninsurable — and insureds start thinking that self-insurance might be a good idea. Many insurance companies were in the same boat as C&F — reeling from underpricing and under-reserving. The lucky ones recapitalized, but many went out of business. Instead of necessarily looking to take advantage of the opportunities afforded by this hard market, many companies were simply trying to survive. That was a very hard market. In the wake of the 9/11 tragedy, fear of future terrorist attacks led to a different flavor of hard market. The fear was justified, causing many companies to pull in their capacity — which caused rates to rise dramatically. However, there were companies willing to bet that the risk was manageable at those markedly increased prices. Some companies had already fixed their problems from prior decades and were ready to take advantage of the hard market. Some companies actually used the hard market to dig their way out of prior year problems. Several new companies were formed specifically to capitalize on the opportunity. Even so, for a hard market to exist, some companies have to stay on the sidelines – or run in the other direction. C&F was one of those companies that was not yet in a position to capitalize on the hard market. This would weigh on the company…until the next hard market. I t is a testament to Prem and the Fairfax team that, by the end of 2005, they were coming to the bumpy end of the Seven Lean Years. Leading the way was Andy Barnard, who at that time was CEO of Odyssey Re, one of Fairfax’s largest companies. Odyssey Re had fixed their problems with enough time to take advantage of the post-9/11 hard market — and was now doing quite well.
Nick Antonopoulos and Marc Adee.
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