Why the name “Mosaic,” and why Syndicate “1609”?Mitch:
It’s the idea of beautiful pieces coming together to make a gorgeous mosaic. When we were thinking about the business model, we wanted to bring together the best elements of the insurance industry and combine them with a centrepiece that lay at the heart of the mosaic — a Lloyd’s syndicate.
1609 is a shout-out to Bermuda, this being the year the Brits discovered the island, although I always like to point out the “discovery” was the result of a shipwreck which left three people stranded who made the island their home and the British territory it remains today. So, we thought the number was appropriate, as it symbolised a new beginning for us, and we were thrilled when we learnt that it was available for our new Lloyd’s syndicate.Mark:
For me, it’s also about how the mosaic represents the creative side of our business and the skill and knowledge that each member of our team brings to their area of specialty insurance, and how they tailor solutions for our clients. It brings together the art and science of risk, which I think is a little different to the standard “corporate logo” approach. We really wanted to set ourselves apart in that way.
Why was Lloyd’s seen as the ideal centre of the Mosaic?Mark:
I’m preaching to the choir here, but tapping into the Lloyd’s global brand is obviously huge and gives you a seat at the top table. Combine that with the security ratings, licences and capital efficiency — Lloyd’s just made sense. If we were to set up a business outside Lloyd’s, the cost of licences, ratings and regulatory compliance would far exceed what we pay in effectively outsourcing all those relationships. Lloyd’s is also the home of syndication, and a big part of our business is based on that model. And with governance becoming increasingly important, the fact Lloyd’s sets the bar high in this respect works in our favour, as our capital providers can be confident in a robust and high-quality governance framework that’s probably not replicated anywhere else in the world.Mitch:
The cost of operating at Lloyd’s gets a lot of attention, but you can’t buy the credibility and recognition you get from having gone through the entry process and becoming part of the Lloyd’s franchise. It certainly gives investors more comfort, and having all our capital in one place gives us a fantastic advantage and opportunity to maximise ROE.
We also believe the cutting-edge technology we’re building allows for a more modular approach and fewer touchpoints for processing. Automation reduces costs, while making our underwriting and support processes more efficient. This aligns with the Future at Lloyd’s objectives and we see Mosaic playing a key role in helping drive much-needed modernisation in the market.
The bar for entering and operating in the Lloyd’s market is set high. How important was it to have the support of Asta through the entry process, and how will its support help your business as you grow?Mitch:
In addition to getting the business up and running, there are a huge number of challenges involved in getting a syndicate approved. You have to know who to talk to, and even the most experienced Lloyd’s people still have to navigate these as effectively and efficiently as possible. Of course, we had a global pandemic to deal with, as well, which meant we had to do everything in a virtual environment.
Having Asta by our side was a tremendous benefit. Being able to make the right contacts at the right time to facilitate the approval process during the “Make it Happen” phase was essential. Being able to rely on its expertise, particularly when it came to Lloyd’s Minimum Standards and other requirements related to processing, reporting and governance was vital. I don't see how anyone would be able to do it without a partner like Asta, and it is clearly best-in-class when it comes to Lloyd’s entry and third-party management. We’ve developed a very good partnership and we’re thrilled by what we’ve been able to accomplish so far with Asta — its support was crucial in helping us focus on the business side and getting Mosaic approved as the first independent new syndicate since 2018.Mark:
This is my 35th year in the market, so I’d classify myself as a Lloyd’s groupie, having founded a managing agency before, overseeing four syndicates. So you might think I’d know it all, but the truth is, a new syndicate still needs a managing agent. Based on our analysis of the market, we felt the stability and certainty of Asta’s support would result in getting us approved and out to market much more quickly. As for the future, we look forward to working with the Asta team as we grow.
Where do you see Mosaic in five years’ time?Mark:
We think our independent structure will be around for a long time — way beyond five years, and the only difference then will be scale. The emphasis will continue to be on specialty lines like Transactional Liability, Political Risk, Political Violence, Cyber and Finpro, and we’ll launch an Environmental business at some stage. The unique point about all these business lines is that they have a high technical barrier to entry, high margin, and underlying growth potential. So, we've given a lot of thought to what we want to do, researched it very carefully, and laid out our stall very clearly.Mitch:
Our vision is straightforward, and we’ll get there by being focused on specialty lines of business, using technology that supports the model, and creating an entrepreneurial environment where the people we’ve recruited can grow with us.
What do you think the insurance industry will look like in 10 years’ time?Mitch:
I would start by saying you would be interviewing a robot. And I’m only half joking, because I do think the impact of technology on the front end of our business will be much more dramatic in the next 10 years than it was in the last 100.
In our industry, unlike most of the financial sector, much of the development of technology has been focused on the back office and processing. More recently, even with newer technology, it still seems most people are focusing on processing, just trying to get more access to data from the underwriting process. But you actually need to focus on the front-to-the-back, where the interaction between the underwriter and the market will be more automated and underwriters will have much of their work and analytics done for them. We’re working on technology right now that is the beginning of the new model you’ll see, but I don’t think it’ll take 10 years...more like two or three.
I see a more automated marketplace in the future, and for us, it’s about combining that with the technical and commercial knowledge our team has, to underwrite specialty lines profitably. That’s our sweet spot and the Mosaic difference.Mark:
I think Mitch is right, and the impact of technology will be felt far more quickly now. There’s going to be a strong convergence between underwriting and distribution. You’re already seeing that being driven more by brokers. Technology really opens the door for other mega-distributors to come into play, and it’s not too far-fetched to see something like Google distributing personal lines in a massive way. The other dynamic in the next 10 years and beyond will be the shift in gravity from the US — by far the largest insurance market now — towards Asia. We must start thinking now about how we engage with that market and the products they’ll need. I think that’s going to be a huge trend for the next decade.
You’ve talked a lot about Mosaic “eating its own cooking”— what does that mean?Mitch:
This comes back to the point about Mosaic’s model and how we’re combining various aspects of the insurance industry to create a hybrid specialty insurance company. What this means is that Syndicate 1609 will be our centrepiece, taking the lead line and controlling the claims process based on the appetite of our specialty lines, which, in turn, are aligned with our third-party capacity providers. The result is that we all benefit from risk distribution and diversification. Whatever we are writing for ourselves, we’re also writing on behalf of our syndicated partners — whatever risk they’re taking, we are as well, and what we put on our own balance sheet is the same result as our syndicated partners. We think this hybrid model is the best way to utilise the underwriting capacity and talent we have.
The only thing I’d add is the personal and professional commitment of our team in making significant contributions to the equity of the business. It’s a bit like the old days when we talked about Lloyd’s underwriters writing on their own syndicate — that’s what we're doing, but in a big way. And it’s personal.
Talking of cooking — what are your respective signature dishes?Mitch:
“Not much” would be my starting point! But like a lot of people, I think I’m very good on the barbecue, although only the people I’ve worked with can say if I’m good at grilling anything — or anybody. I can throw the usual delights, like steaks, fish, and hamburgers on the grill and have them come off in a good fashion. But my real signature dish is the sauce to accompany the barbecue — I find that marinating your food with something alcoholic improves the cooking — and the cook. That’s the goal.Mark:
I’m learning to cook a pretty good lobster linguini, but If I had to name one signature dish, it would be a Sunday roast. My Mum is a phenomenal cook and she taught me, as a child, how to knock up a pretty good roast, although there’s not much call for that in Bermuda. These days, you’re more likely to find me enjoying Mitch’s barbecue marinade on a Sunday afternoon than tucking into roast beef and Yorkshire pudding.
As residents of Bermuda, you are clearly passionate about the island and all it has to offer. What role do you see Mosaic playing in Bermuda — both from a business perspective and in the local community?Mitch:
We love Bermuda and are always looking to translate our passion into things that help the island — to be more than just a corporate sponsor at another corporate event. When we started Ironshore, we supported the island’s Western County Cricket Association, and it was great to see the positive impact our involvement had on the teams and the wider community. Even though I knew nothing about cricket, had never even watched a match, and had no idea what was going on, I was pleased to be asked to be an announcer on the radio for one of their games.
We then became very involved in the Relay for Life. This was an event that brought together all the different people of Bermuda — from every background, race, colour and denomination. Obviously, cancer touches everyone, so it was great to be involved in creating the first and only radiation treatment centre, so Bermudians who needed treatment did not have to leave the island.
We’re also keen to help the Bermuda government in improving the way the island operates to become more effective and efficient. One standout is the work of the Bermuda Monetary Authority (BMA), which has made the island an attractive, respected place to do business, and in doing so, has created one of the biggest, most impactful insurance markets in the world.Mark:
On the commercial side, many outsiders see Bermuda as more of an excess market (think ACE and XL formed in the hard market of the ’80s) and it’s not widely appreciated there were over 30 major international insurance and reinsurance firms based here in 2019. Today, there’s around $134 billion of capital and just under half of Lloyd’s capacity has its origins in Bermuda. Then there’s Mosaic and the start-up class of 2021 — collectively bringing £19 billion of insurance capital to the island. That’s hugely significant.
There’s plenty of talent in Bermuda and we’re recruiting actively from the local market. It’s intrinsic to our business model that we engage with locals.
As co-CEOs, what specific (individual) ambitions do you have, and what attributes will you bring to the Mosaic business?Mitch:
I think the alignment Wheels and I have is unique. Even as we’re chatting now, when Wheels is about to say something, I kind of know what he’s going to say. We’re like twin brothers.
This tremendous alignment and symmetry of objectives translates into the business. We bring complementary skillsets. My background as COO and CFO of an insurance company and Wheels’ underwriting background are a good combination, and we know enough about each other’s worlds for the sum to be greater than the parts. The biggest thing is the ability for us to bounce things off each other and then agree a common approach. In many respects, Mosaic is getting the benefit of this without having to resort to expensive consultants or defer to an external board of directors for decision making.Mark:
I couldn’t agree more. I think if you talk to a lot of CEOs, one of the things they’ll say is that it can be a lonely job. Being able to bounce things off each other and to do it in a way where there is no conflict and no clash of egos, is of immense value. And there’s the bandwidth benefit. Mosaic has two CEOs, which means you get Blaze + Wheels almost 24 hours a day.
How do you both enjoy downtime in Bermuda?Mark:
I was an early adopter of Bermuda shorts and I love the socks. It takes me back to my childhood and my English school uniform. That’s not to say I’m wearing those items all day long — I’m a bit more waterborne than Mitch, so a lifevest or wetsuit are usually worn when I get out on the water. And if you like food, Bermuda has a whole host of world-class places to spend your downtime.Mitch:
I took up croquet this year. It was one of those lockdown things and it’s great fun. Other than that, it won’t surprise anyone who knows us that Wheels and I like to play golf and we try to leave Wednesday afternoons open to play a round. It also gives us the chance to talk about life and where we think the business should be going.
You established Mosaic during a global pandemic. What challenges did that present from a personal and business perspective?Mitch:
Bermudians tend to travel a lot and Covid-19 meant that all stopped. As a result, families stuck together more, and because Bermuda was open, a great sense of community was felt on the island.
As Wheels says, being able to navigate the start-up of Mosaic virtually was something no one had an arrow in their quiver for. We do now, and while I don’t see it as a substitute for getting together, it has given us another skillset which we can use to get things done in the future. The priority right now is to get to London as soon as we can, as we need to see our people at the box at Lloyd’s and in our new offices on Gracechurch Street.Mark:
Covid’s been exceptionally well managed here. The government’s done a good job in keeping a lid on it and I think that’s reflected in the low mortality rate. It’s been an extraordinary and unique experience to work in that environment, raise capital — we haven’t even met the people at Golden Gate Capital in person yet — and build a team. Of course, we handled the whole process with Asta remotely and with huge success.
I know Mitch will agree the most difficult thing is missing family and friends back home. As a passionate Welshman, I was sorry to have missed — for the first time since 1983 — attending the England v Wales game and a sixth Six Nations title for the Welsh. This was only slightly spoilt by the French denying us a fourth slam — just as England suffered at the hands of the Welsh in ’99 after Neil Jenkins converted that late Scott Gibbs try at Wembley. I know my English friends remember that game as fondly as I do!