Ajit Jain’s memorandum about the new CEO at Berkshire Hathaway’s Gen Re. via WSJ and see background there as well
Ever since the most unwelcome news of Tad’s retirement, there has been a good deal of uncertainty at Gen Re. I can well understand that, and while I regret that any anxiety may have been caused by my failure to communicate with you before now, it is the case that important issues have required careful consideration. I wanted to proceed more thoughtfully than expeditiously-and before any of you rush to remind me, I know that the two are not mutually exclusive. In any case, I do want to share my thoughts with all of you now, as transparently and plainly as I can.
As to the CEO position, I have happily selected my colleague at the Reinsurance Division, Kara Raiguel. Kara, an actuary by background, has been a key player at our Reinsurance Division for over fifteen years (and for the last ten, she has been my “secret weapon”). It would be difficult to overstate her accomplishments during that time. She has overseen the establishment of our significant workers’ compensation operation in California; she led our foray into the Indian reinsurance market; she established and managed the formation of our municipal bond insurer; and she has played a leading role in the underwriting of some of our largest retroactive reinsurance transactions. In short, Kara is a true renaissance woman in the insurance and reinsurance industry.
On a personal level, Kara is a high-energy, collegial and fast-thinking executive. She loves challenging work, and she enjoys making things happen. When I first met her, I knew she was going to be a high performing/ low maintenance colleague. She has exceeded my high performing expectations, and has fallen well short of my maintenance expectations-«not just low, but zero maintenance. I think you will have fun working with her, and I know she is just as excited to be joining you as you should be about her joining Gen Re.
In addition to finding the right person to succeed Tad, I have also taken the time over the past few weeks to meet with several of you in order to evaluate the business in some detail. I must say that I am very impressed by the platform, the client relationships, the product portfolio and the rock-solid balance sheet. I know as well as anyone how difficult this business can be, and Tad has done an unbelievable job of both addressing old mistakes and avoiding new ones. Failing to do either, and do it well, has resulted in disaster at other companies in our industry. Tad has masterfully navigated Gen Re through these challenges. While the reinsurance industry will be going through a shake-out over the coming years, I have no doubt that we will be one of the few winners in that process.
Having said all that, I have gotten a sense in my discussions that several people, both internal and external, feel that Gen Re has become less relevant in the marketplace than it once was. That concern, together with the serious headwinds that the reinsurance business is facing and will continue to face, requires us all to consider whether and what actions might be taken to best position Gen Re for the next chapter. Nonetheless, we are not interested in any hasty decisions or changes that could do harm to the well-oiled machine that, thanks to Tad, Gen Re has become.
So, for the next ninety days or so, I have asked Kara to have as her first priority and chief objective to determine how best to grow Gen Re’s book of business without sacrificing the underwriting discipline and integrity that has been the hallmark of the past few years, as well as how best to broaden business relationships without doing damage to the platform.
In closing, let me once again thank Tad. I am sure you all join me in wishing him the best. I also want to thank all of you for your patience, professionalism and perseverance, and for welcoming Kara aboard. I very much look forward to seeing where she, and you, together will take Gen Re over the coming years.