Ajit Jain

So share us a little bit about the US and any particular differences you see when you look at MGA Connect in the US and in the UK.

Yeah well US has always been in our sights and actually the first project we ever did wasn't for an MGA but it was for arguably the most famous man in insurance Ajit Jain at Berkshire Hathaway and we loved working with him and we had an opportunity to you know cut our teeth and we thought well you know let's let's start with him and then Let's see how we can expand in the U.S. from there.

The U.S. is different, you know, admitted, non-admitted, different state regulation, taxes.

So you've got to learn all that.

But they are fundamentally different.

Because of their extreme underwriting discipline, driven by managers like Ajit Jain in the reinsurance division and Tony Nicely at Geico, they generated an underwriting profit of $3 billion in 2013.

Meaning they collected more in premiums than they paid out in claims.

They were literally paid $3 billion for the privilege of holding $77 billion afloat.

Just

a massive deal.

Now, if you are an investor and you hear that your company is taking on unknowable asbestos claims from 1992, aren't you terrified? Aren't they just buying a ticking time bomb? Why would Ajit Jain, who is famous for avoiding stupid risks, agree to take that on?

It all comes down to the mathematical discipline of time value and downside protection.