Anthony Taylor was taken aback when told he would be handed the 2004 (Re)insurance Person of the Year award from the Bermuda Insurance Institute at a gala dinner on Saturday night.

Mr. Taylor, who is chairman, president and chief executive officer of Montpelier Re - one of a wave of reinsurers that set up in Bermuda after avoid in capacity following the September 11, 2001 terrorist attacks - said he was a little baffled at beating out those who have been working in the Bermuda market for much longer.

But the 2004 judging panel thought otherwise, no doubt bearing in mind that while Mr. Taylor may have only been in Bermuda since taking up the reins for Montpelier in November, 2001, his solid reputation from a long career in the London market precedes him.

“Today there are few active underwriters with Mr. Taylor's longevity, and hardly any whose reputation is of such high standing. He is well-known and immensely respected throughout key reinsurance markets worldwide,” the BII said in naming him for the award.

Mr. Taylor was recruited to Montpelier after a long career in the Lloyd's of London market, most recently as deputy chairman of Wellington Holdings Plc, a publicly traded Lloyd's underwriting vehicle. Although Mr. Taylor had been making visits to Bermuda for a quarter of a century, he never imagined living here. Indeed, had he not got a call from White Mountains' legendary leader Jack Byrne inviting him to lead Montpelier he likely would have finished out his career in London.

Not surprisingly, this is not the first award of its kind for Mr. Taylor - referred to in a 2001 Wall Street Journal report as one of the “kings of Lloyd's”.

Last November, he was named Outstanding Achiever of the Year at the 2004 Insurance Day Awards, an honour he graciously accepted as a token of the work of the Montpelier team. “I feel that this award reflects the commitment and excellence of all my team, whom I am privileged to lead,” he said, at the time.

That award, given in London, may have come as less of a surprise than being chosen for the Bermuda Insurance Institute award.

“I was surprised after being here just over three years,” he said, adding that he also felt slightly shamefaced as he, in years past, had been vocal in his opinion that the Bermuda re/insurance market would not last

“When I was in Lloyd's ten years ago I addressed some conferences on the basis that the Bermuda market wouldn't actually make it in the long run,” he said with a laugh and added: “Make sure you put in that I was totally wrong.”

Now Mr. Taylor has made a strong about-face when it comes to the staying power of the Island as a leading re/insurance centre, even representing the Bermuda market at the Property Casualty Insurance Association of America annual meeting in Washington D.C. last November.

Mr. Taylor, 59, said he doesn't miss working in London a bit.

“I have no interest in going back. I used to commute effectively two hours each way every day. Getting around London now is a nightmare. I couldn't face it again.”

In happy contrast, Mr. Taylor's commute between home and his Hamilton office is about 15 minutes - and that is longer than the two minutes it used to take to get to his Par-la-Ville offices in Crown House, after Mr. Taylor and his wife recently moved house. They now call home a property on the Tucker's Point development. Mr. Taylor and his wife spend about 75 percent of their time in Bermuda, with the balance spent mostly in England. When they do go home it is no longer for work but to be with family.

“We have a big house in the UK, but now I don't have to commute, which is just great,” he said. Mr. Taylor will also be going home this year to celebrate turning 60 with same-aged colleagues.

“Lots of us were born in 1945. In fact in London we have a club, and a dinner every year. There are actually quite a lot of senior underwriters and brokers born in 1945.

“This year we are going to have a big cocktail party in London for the market given by all of us 1945ers,” he said. Mr. Taylor, a father of three grown daughters, joked that his offspring's exposure to the Lloyd's market during school breaks was enough to turn them away from following their father into the reinsurance industry. Mr. Taylor has two daughters in the UK - a teacher and occupational health nurse - while a third daughter, a GP, recently relocated with her husband and two boys to Australia.

“All of my daughters did holiday work in my operation in Lloyd's years ago and none of them had any interest,” he said. After nearly 40 years in the industry, Mr. Taylor said he welcomed the move from the London market to Bermuda, indeed he has cited his years in Bermuda as the most “exciting and challenging” of his career. It has been quite a whirlwind period, with Montpelier growing in just over three years to a staff of 65. In the last year the company has ramped up its numbers with some 25 staff additions. The increases, Mr. Taylor explained, came largely from Montpelier building up its modeling technology and IT department.

“We now have 11 people in our catastrophe modeling area. In addition, we have built up our IT team and then things like Sarbanes-Oxley [corporate governance requirements for companies have increased the number of legal/administrative/accounting staff.”

However Mr. Taylor said he thought the company's staffing numbers had hit a plateau, at least for now.

“Unless we see some fantastic new opportunity, our head count will be pretty stable now,” he said. There are also no plans to change Montpelier's business model, which is to write primarily from one market - Bermuda - enabling Mr. Taylor to follow a very hands-on style of management.

Speaking with The Royal Gazette in the company's tastefully decorated board room, Mr. Taylor, sitting at a giant wooden table surrounded by swish swivel chairs, said: “All the underwriters and some of the actuaries; we meet every morning in here at 8:30 and we go through the business we've seen the day before. This is a big contrast between us and the big reinsurance companies with 20 offices around the world. How can you have that sort of intimate knowledge of what is going on. I feel very strongly on this.”

Lest someone think that Montpelier's mode of operation includes spending top dollar on office decorating, Mr. Taylor points out the very tasteful environment they work in was inherited from a previous tenant occupying the space some years ago. The company's present office space - at both Crown House and in Mintflower Place, Par-la-Ville Road - is temporary while Montpelier's new office space is constructed at the Waterfront on Pitts Bay Road.

“There are two buildings going up [at the Waterfront. One is AXIS and one is us. We should be there in the summer of 2006,” Mr. Taylor said. “Then we will no longer be nomads,” he added, with the move spelling a welcome end to Montpelier changing offices several times since being founded. The company initially took space in what had been ACE Limited's building prior to its move into its new Woodbourne Avenue global headquarters. Later Montpelier moved to Par-la-Ville Road, including its second office space at Crown House when another post-September 11 company, Endurance Specialty, moved out to a vacated space at the Waterfront. When Mr. Taylor first came to Montpelier, his titles included chief underwriting officer. Later he assumed the chairmanship from Mr. Byrne and let go of the CUO title. However, Mr. Taylor readily admits he still keeps a close watch on what business the company writes, or doesn't write. In fact, a more competitive rates environment leaves Mr. Taylor believing the company will see growth fall off this year, but admonishes renegade companies who are trying to undercut rates.

“We are still seeing a competitive market with rates still overall going down. What has surprised me, since we started up, are the pious statements of almost all the reinsurers, saying ‘we are never going to do those things again'. Yet already they are starting to drop their standards, and it has only been three years,” he chided.

Mr. Taylor is clear that Montpelier is not a company that is going to follow the prices down, having said last month when the company announced its 2004 results that business at January 1 renewals was down in excess of 20 percent.For the 2005 year, Montpelier's premium income is expected to drop by at least ten percent.

In contrast to some other reinsurers going after growth, Montpelier has actually been reducing pelier has actually been reducing its book. The company recently announced it would return $390 million to shareholders in a special dividend. “We have done this to downsize our capital to the size of business we want to underwrite. But just because we have given back the capital does not mean that we cannot run a very viable company with the reduced volume in the softer markets, and then we'll be in a good position to expand again when whatever event that is going to happen, happens and opportunities open up again.”

Mr. Taylor said there were signs that underwriters in the global branch offices of European reinsurers were undercutting rates despite management at head office saying the policy is to walk away from business that isn't priced to turn a profit.

“The traditional organisation of a reinsurance company is to have many branch offices around the world all underwriting local reinsurance business and I think it is very difficult to get the message out; to get a consistent underwriting policy [reflecting what the management at HQ say and what the guy on the ground 10,000 miles away with totally different traditions of business. If you are stuck a long way away and your market is very competitive, and you hold the line and not write any business - well, you are likely to be out of a job.

“We are still seeing many other companies going for growth.”

Mr. Taylor said he was not laying the accusation against Montpelier's Bermuda rivals. Although he said other reinsurers in the so-called ‘class of 2001' tended to have offices in London, Dublin and the US, their networks were rarely wider than that.

“It is not a pattern that we want to follow but in the same token it is not the same as Munich Re and Swiss Re with 20 reinsurance offices around the world,” he said.

Although scaling back its book of business, Mr. Taylor maintains that Montpelier and the other 2001 Bermuda reinsurers are in a good position, despite being hit by large losses from a spate of serious storms in the Atlantic and Pacific last year.

“There were almost three full years of minimal catastrophe activity and large risk loss activity so I think the profitability for companies such as ourselves and other Bermudian operations was in excess of what we expected and [beat what our projected results would be,” he said.

“Despite the catastrophe losses in 2004, the overall level of rates is still adequate on most business and there are still good margins being worked through the system on the unearned business written before the catastrophes.

“These still have to be earned out over the next year or two.”

In a nutshell, Mr. Taylor said the impact of the catastrophe losses in 2004 was “on top of relatively healthy base results. That is the contrast with the impact of the World Trade Center [attack. That was on top of pretty poor results and there were also all the legacy issues. That is where you get the big effect.”

He said the losses from the 2004 storms, in aggregate, probably rivalled the WTC claims but businesses were in a better position. Critics of the ‘class of 2001' predicted that some of the companies could bow out of the market once the hard market turned. So far, that has not proven to be the case.

Certainly Mr. Taylor is clear that Montpelier's game plan is long term, adding that Montpelier and the other companies that set up in Bermuda at the same time - including AXIS, Arch, AWAC, Endurance and later, Platinum, Aspen and Quanta - were a lot more serious than they had first been given credit for.

“Almost all of us have actually turned into public companies of significant size,” he said. Allied World Assurance Company (AWAC), which AIG holds a significant stake in, is the only one that hasn't gone the IPO route.

He didn't rule out some merger and acquisition (M&A) activity in the future, but thought it was not as likely as in the past.

“On the one hand, the M&A activity that occurred in the late 1990s, early 2000s [between reinsurers around the world has in almost all cases been a disappointment if not a disaster so those lessons are fresh in the memories of the reinsurance community.

“On the other hand, when people's top line starts slowing down and results start deteriorating and some of the casualty business that has been written starts developing, then there are going to be pressures on companies to look at their future prospects,which could include some M&A activity in the future,” Mr. Taylor concluded.