Aspen's marriage of skills

Our cultural history is littered with iconic odd couples – Abbott and Costello, Laurel and Hardy, Sherlock Holmes and Watson. Rupert Villers and John Cavoores are the insurance sector’s offering. Cavoores and Villers, who have known each other for more than 20 years, are joint chief executives at the helm of Aspen Insurance Holdings’ insurance arm, Aspen Insurance.

Broad and burly Villers, who bears an uncanny resemblance to the late British comedian Ronnie Barker – greets with a bracing handshake and stern smile. By comparison, tall and sinewy Cavoores offers a gentler welcome with his New York accent and the offer of strong black coffee.

Villers returns in tandem

The new working partnership is in its infancy. In early September 2010, Villers surprised the market by announcing he was stepping aside as chief executive of Aspen insurance after only nine months in the job.

Villers jokes: “I had realised that the breadth of this job had become very large, geographically. We made an internal announcement, but in Lloyd’s, that’s the equivalent of putting it on a bulletin board.”

Little over a week later, Villers surprised the market once again – he was back. But this time he had a new partner in the form of his long-time friend, Cavoores, who explains: “Rupert and I went out to dinner one night and we discussed taking the chief executive partnership seriously. Over dinner, we decided on our strengths and weaknesses.

"We designed a structure to capitalise on our strengths. We both complement each other in relation to our weaknesses, though I have more than he does.”

Closely entwined

“It’s a perfect marriage of our skills,” Cavoores adds, as he entwines his fingers to illustrate their close relationship.

The pair’s heavily entwined lives began in 1988. They met when Cavoores worked as an underwriter at Chubb and did business with Villers, who went on to co-found SVB Holdings (now Novae Holdings) in 1986, and joined Aspen in April 2009, becoming Aspen Insurance chief executive last year. Former Chubb chairman Cavoores has been a director of Aspen Insurance Holdings since October 2006, before joining Villers at the helm in October 2010.

Villers admits he wasn’t ready to leave the chief executive position in September; he just felt the job left him spread too thinly. When the marriage of Villers' and Cavoores' skills was originally proposed to Aspen Insurance Holdings chief executive Chris O’Kane, he readily agreed.

Shared strategic role

On paper, it has logic: Cavoores, who is US-based, now oversees Aspen Insurance US operations and Villers, who is UK-based, oversees all non-US business.

But when asked how successful a co-chief executive partnership can be when spread across two continents, Villers leans back in his chair and says bluntly: “We’re going to do the job together. We are not doing half each.”

Cavoores interjects more gently. “There isn’t really an overlap in terms of day-to-day business. The advantage of having co-chief execs will be when that we set strategy and direction, we do it together. We collectively agree on the right or wrong direction to go.”

After pausing for some time, Villers adds: “This arrangement doesn’t mean we are going to have John doing this side of the world and Rupert doing this side. We’re vain enough to both know we have something to offer each side.”

Risk management launch

In early 2011, Aspen Insurance launched itself headlong into the UK regions with its new risk-based arm Aspen Risk Management, headed up by former Fusion founders Kevin Pallett and Geoff Crisp.

With three offices open in Birmingham, Bristol and Glasgow, Aspen is reaching out to new markets at a time when commercial lines are highly competitive, but Villers is optimistic. “We are not thinking ‘Let’s explode and challenge the big five insurers in 2011’. We’re putting in infrastructure and preparing for what’s coming our way.”

They are confident that a company-wide decision to write business selectively will mean prosperous returns when the market hardens.

What’s more, Cavoores believes the market is about to turn. “Every 10 to 12 years there is a different market cycle. Right now, we are at a point where history would suggest the cycle will change. But cycles change because of a specific event. History would suggest there is an event lurking out there that will cause higher demand for the products.”

Pallett and Crisp to head regions

But why the regions and why now? “We’re going into the UK regions but we don’t think we have an entitlement to great slabs of business. We are keen to diversify our product offering and see it as a way of not getting too over-exposed to the vagaries of any one market,” says Villers.

To achieve this goal, the pair chose another entrepreneurial duo, Pallett and Crisp, to lead their new regional operation. The pair previously founded Fusion Insurance Services in 2000 (which was backed by Villers' then-company Novae) before selling the business to Towergate in 2005 with gross written premiums in excess of £100m.

Villers' faith in Pallett and Crisp’s ability to manage a start-up brought them back to the fold in last July. When asked why they chose Pallett and Crisp, Villers says warmly: “I like them. I think they’ve made a good impression here at Aspen with their deep knowledge of the markets they want to play in. We are drawn to their energy levels and entrepreneurial spirit,”

Middle-market challenge

Despite ferocious competition, they are confident about their ability to infiltrate the regions. What’s more they seem to relish the challenge. “It’s a nice territory to capture a middle-market commercial account with five to 250 employees,” says Cavoores leaning forward to place his elbows on the boardroom table.

“They go to the local regional broker to place business. They don’t go to London. With these types of customers, we can offer added services that maybe the larger carriers don’t offer.”

Villers is quick to add that size isn’t everything in the market; it’s about how you use what you’ve got. “We are not looking to capture a big market share. We’re not trying to buy the index so we’re not asking ‘Is it a good time or not?’ It’s a good time for our offering because we think our offering is different.”

A heady opiate of optimism blankets Aspen’s new project, and it is hard not to get dizzy when around the pair’s ambition and sheer determination. The odd couple Villers and Cavoores are determined to defy the cynics and make their imprint on the market. As the old song goes, it does take two.