David Brown
Chief executive officer
Flagstone Reinsurance Holdings Ltd.
David Brown has served as chief executive officer of Flagstone since What motivates and excites you about the sector?
its inception. From September 2003 until Flagstone was established, he
I think the whole insurance and reinsurance industry is underdeveloped
served as chief executive officer of Haverford and as chief operating
relative to the financial markets in many ways, such as how we distribute
officer of West End Capital Management (Bermuda) Limited.
our products, how we price and manage risk, and how we slice and
Brown joined Centre Solutions (Bermuda) Limited in 1993, and was dice our capital to minimise the cost. Being in a position to change
its president and chief executive officer at the time of his retirement these paradigms, even in a small way, is intellectually stimulating.
in 1998. Prior to joining Centre, he was a partner with Ernst & Young
What would you like to change about the industry?
in Bermuda. He is the non-executive chairman of the Bermuda Stock
Exchange and a director and trustee of the Schroder Family Trusts.
I would like to see a more Darwinian ‘survival of the fittest’. Too many
companies survive on sub-par returns accommodated by weak boards
Brown led the team that analysed, structured and negotiated the
and inactive shareholders. The average return of our industry over time
acquisition of Merastar Insurance Company in 2004. As chairman of
is poor relative to major market indices such as the Dow and S&P.
Merastar, he led the board’s oversight of the successful turnaround
strategy. Brown is also a director of Island Heritage Company. At Centre,
This will not be cured until boards and shareholders fire, or otherwise
he was responsible for the global operations of a group with more than
hold accountable, management who focus on market share or asset
$7.0 billion in assets and offices in several countries. During his 10 years
accumulation over returns.
with Ernst & Young, he specialised in insurance and was involved in
What do you consider to have been your biggest personal achievements
the liquidation of numerous insurance companies in Bermuda, the UK
during your career?
and the US.
Being able to create Flagstone from scratch with one of my best friends,
Brown is a Fellow of the Institute of Chartered Accountants in England
Mark Byrne.
& Wales and a Member of both the Institute of Chartered Accountants
of Bermuda and the Canadian Institute of Chartered Accountants.
What has been your biggest disappointment?
Several years after I had left Centre Re, the company wound down.
It was full of wonderful, smart people, many of whom became good
How did you get into reinsurance initially?
friends. All went on to successful careers elsewhere, but the break-up of
I moved to Bermuda in 1982 to join what became Ernst & Young (E&Y).
such a great group was sad to see.
Reinsurance in Bermuda was growing mainly with captives, and I began
to specialise in it. Towards the end of the 1980s, the number of physical
What is the best piece of advice you have received during your career?
presence companies grew, starting with the likes of ACE, XL and Centre Michael Palm once told me: “Don't wrestle with a pig—you both get
Re. After 10 years with E&Y, Steven Gluckstern and Michael Palm, who dirty, but only the pig enjoys it.” He was advising me that some people
were the founders of Centre Re, persuaded me to leave my partnership you can deal with have a poor approach and attitude to business. It is in
and enter the industry as a principal rather than a service provider.
their nature to be unprincipled, and dealing with them will always be
tough. Better that you recognise this up front and avoid dealing with
them at all.
“ Learn the ropes, but
Knowing what you know now, what advice would you give to someone
who’s new to the reinsurance industry?
pay attention to new
Pick the right employer; not all are equal. Work hard; a good boss will
developments such
notice. Learn the ropes, but pay attention to new developments such
as sidecars, cat bonds and other insurance-linked securities—they are
as sidecars, cat bonds
indicative of our industry’s future.
and other insurance-
Outside of work, what are your hobbies?
linked securities—they
I love anything to do with the water—fishing, sailing, swimming and
scuba diving. My only serious land sport is tennis, and I hate golf.
are indicative of our
What is your greatest achievement in your personal life?
industry’s future.”
My biggest personal achievement was persuading my wife to marry
me. We have been together for over 32 years and she is the centre of
my life.
Bermuda Re/insurance . September 2008 59
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