Book Review: Risk and Reward by Stephen Catlin

2016 was one of my most productive years for reading books, While working at Admiral Insurance, I commuted to Cardiff in south Wales from my small home town on train, taking around 80 minutes each way. A large portion of my commute was taken up in riding the tired pacer trains operated by Arriva Trains Wales into the heart of the city’s capital. Among the jostling of rat-race tired bodies, thrashing of the engines and thrum of the incessant heating system which ran through summer sun and winter frost, I found time to read more books than I have accomplished in any other year of my life.

In 2017, this habit changed markedly with the advent of a short lived venture into the world of academia. No longer spurred on by the dullness of the daily commute, my reading regimen fell off a cliff. It was only in August of last year that I rekindled my enthusiasm for reading until I began to read this book. Make no mistake, it has taken me five months to complete this modest book of 308 pages. I lost interest in reading this book on more than one occasion.
In the meantime I have changed my career’s direction, from the world of academia and back to software development but back to the insurance industry with renewed vigour. In part I give thanks for this to Admiral Insurance which has a really friendly atmosphere which has impressed on me great appreciation of the industry. The other thing that prompted this return was Stephen Catlin’s book, Risk and Reward: An Inside View of the Property/Casualty Insurance Business.
As a disclaimer, let me explain that I did not have a great background in Insurance prior to this book. My perspective is of a software developer with, at present, very limited understanding of Insurance.
Stephen Catlin has provides his unique perspective on the insurance industry, a leader in the industry who has worked his way up from being an underwriter; to CEO of his World-reaching company; to conducting a significant merger, resulting in a merger resulting in XL Catlin.
The strength of this book lies in that it initially covers basic concepts in the Insurance industry, with a particular emphasis on Lloyd’s of London and its unique syndicate system. While Lloyd’s is no longer the largest insurance market in the World, it plays a significant role in the history of insurance. Catlin expands on the shortcomings and inadequacies felt in the industry since the 1970s and how things have changed as a result from pressures brought on by inadequate handling of reinsurance and poor sources of money backing syndicates.
Catlin then relays the history of his insurance company and goes into detail about his thought process as his company developed, moving their headquarters to Bermuda as well as expanding into other markets and ultimately joining the XL Group to become XL Catlin.
In the final section of the book, Catlin wrestles with his experience and discusses what he learned about being a good leader. Here are a couple of gems that I’ve gleaned from the book:

You don’t have to fight about everything you disagree with. Fight when it matters, and when you do fight, make certain you can win.

In board meetings:

Once I stopped talking so much, my level of influence among fellow directors rose incredibly.

All in all, this book was really interesting to read from someone who is outside the Insurance industry to gain a perspective of how things have been and continue to change. From Catlin’s perspective, the industry has matured significantly in the course of his career; insurance serves a real good in society in spreading the cost of risk. Going forward, raising sufficient and good capital and providing a better customer experience through better software are two issues that need greater attention.

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