For most people, September offers nothing much to get excited - marking the end of their summer holidays, maybe, or the first whiff of autumn. For Robert Hiscox, however, it is one of the most stressful periods of the year.
Three times a day, the 63-year-old chairman of insurance underwriter Hiscox checks the Tropical Storm Risk website to assess the scale and location of any ill winds. Recently he was following Hurricane Ernesto, which began in Havana and put out the lights in Greenwich, Connecticut, before being downgraded. Touch wood, he says, but so far so good. Yet with a large tranche of the group's business done in the US, he is unlikely to relax until October.
Last year 400 natural and man-made disasters were officially recorded around the world, with an estimated $83bn (£44bn) worth of insured damage. Hiscox lost £160m. The group announced annual pre-tax profits of £70m, but as the chairman points out, that figure would have been £230m had it not been for the severe storms that swept the US.
Later this week the underwriter posts results again - this time interim - and the news should be better. JP Morgan analyst Roger Doig has pencilled in net income up from £36m last year to £49m.
But then nothing is constant in this industry. As Hiscox puts it, underwriters are bookmakers: they bet that an event will not happen; the person seeking insurance bets it will. "The odds get very short sometimes. The most foolish words in the English language are, 'it might never happen'."
He believes that just two major hurricanes this year would leave American coastal properties uninsurable. "We can't find the odds worth writing or premiums people are prepared to pay. This year some oil rig owners in the Gulf of Mexico self-insured [where companies set aside their own contingency reserves] because they thought the rates too high. We see permanent self-insurance by big [companies] and insurance cover from governments emerging."
The terrible irony, argues Hiscox, is that the rates are too low when catastrophe strikes. Then the industry puts them up, forcing business to look outside London, the traditional hub of the insurance market. "After the storms last year, I don't think any money was raised in London; it was all raised in Bermuda. Investors like [the offshore haven's] combination of swift bureaucracy and low tax.
"It's a cycle. When rates are at their lowest, you have the biggest hurricanes. Life has a way of hitting us when we are down."
Away from insurance, Hiscox is father to five sons and a collector of modern art - a hobby he has pursued since the age of 16 and now sees him championing British talent like John Virtue and Andy Goldsworthy.
At work, however, he describes himself as tough and exacting, and it was no doubt exactly this attitude that helped him wrest control of his father's firm. Ralph Hiscox founded Roberts & Hiscox in 1947, running Syndicate 33 and specialising in non-marine insurance. Hiscox junior relished his new job underwriting fine art and personal accident insurance. But it was not an easy ride: he wanted to make changes to the business, and father and son clashed. Hiscox senior said it would take years to learn the business; the son reckoned on six weeks. "I was deemed arrogant, but I think I was just confident. I get huge satisfaction in leading a group of people united in a commercial endeavour."
When his father died in 1970, he went to the co-founder, Anthony Roberts, and told him: "It's my turn now. You've run it for 30 years and it's wearing you out." Roberts - a "decent, honourable man", according to Hiscox - decided not to oppose him. "That enabled there to be a bloodless coup," adds Hiscox, who became senior partner at the age of just 27.
With the support of a staff of 10, he set about building up the business. In the early years he came up against some big competitors and thrived on the challenge. "We were nimble and light, able to zip round and send torpedoes into the big cruisers with their fixed guns," he says. "When we wanted something, we were hard and pretty ruthless."
Today the underwriter is a FTSE 250 company with offices in 10 countries, a market value of £880m, annual sales income of £1.2bn and 660 employees.
As well as being a specialist insurer, the group has three main underwriting areas. Hiscox Global Markets underwrites large, mainly international business through Lloyd's and accounts for 60 per cent of overall business. Hiscox International has offshore operations in Bermuda, Guernsey and the US. And more recently Hiscox Inc opened in New York, focusing on specialist retail products for small and medium-sized companies. "We wanted an office with small, well-spread, non-catastrophe business to balance our art and 'high net worth' business," explains Hiscox.
UK and European policies up to £10m are underwritten through the group's retail business, Hiscox Insurance Company, while specialist insurance for high net worth individuals accounts for 25 per cent of turnover.
"We have a very good balance at the moment," says Hiscox. "The challenge is to stay fast on our feet. The battlefields of history are littered with generals saying, 'Turn right', when the man on the field is shouting, 'We must turn left'. It takes discipline to get head office to stop telling people in the field to do things."
Tough and exacting he may be, he evidently inspires loyalty as well: all eight members of his senior management team have been with the company for more than 10 years.
Hiscox himself is steeped in the insurance industry and served as deputy chairman of Lloyd's of London between 1993 and 1995. These became known as the years of reconstruction and renewal, after the market had been in danger of collapse. Hiscox was, he says, pretty effective. "I'm a wartime general: I take no prisoners. Hopeless in peacetime." Self-discipline and an ironic sense of humour, he adds, balance this low boredom threshold.
Likewise he turns on the charm easily and often, but is quick to point out any failings he sees around him. One such subject is what Hiscox believes is our lawless society. He argues that the police are under-resourced - to the extent where insurers are more effective at tracking down stolen goods.
So the answer is simple: the industry should part-finance the police. "We have the resources. We listen to informers. If the police do not see theft as a priority, why doesn't the insurance industry make it one?" Don't bet against this radical idea taking root when its proponent is a hurricane force himself.
BIOGRAPHY: Robert Hiscox
BORN: 4 January 1943.
EDUCATION: Studied economics and law at Corpus Christi, Cambridge.
1964: begins work at insurance underwriter Durtnell & Fowler.
1965: joins Roberts & Hiscox, underwriting for Syndicate 33.
1970: made chairman of Roberts & Hiscox.
1993-95: deputy chairman of Lloyd's of London.
1997: Hiscox floats on London Stock Exchange.Reuse content