Helping Our Partners Weather The Storm.

TALBOT

As the saying goes, the darkest hour is just before the dawn.

Talbot Underwriting underwrites specialty risks within the Lloyd’s insurance market. As an insurance company in a niche market with strong entrepreneurial management and a demonstrated expertise in growing their business, Talbot was a good fit for the Olympus profile.

In 2005 five Category 4 and Category 5 hurricanes ravaged the Gulf coast – and the insurance industry along with it. Talbot’s property business created a concentration in windstorm losses that effectively wiped out the prior
two years’ profits.

Given our past experience with insurance and reinsurance, we understood the risks associated with hurricanes and recognized the strategic value of Talbot’s primary underwriting capabilities. Instead of cutting our losses and exiting the business, we looked for opportunity. We worked with management to re-engineer the underwriting models to better capture the Company’s maximum loss exposure from any given event. We also committed additional resources in restructuring the company’s capital base. And we made long-term decisions to help management take advantage of the climate of firm pricing that typically follows catastrophic loss.

Following the hurricanes, rates quickly adjusted upwards with less capital available in the sector. The next year Talbot reported its most profitable year ever thanks to a reduction in overall exposure, low actual losses and higher market premiums. Net income in 2006 was almost five times greater than in 2004. Patience and perseverance clearly paid off for Olympus and Talbot’s management team when we sold the business to a reinsurance company in 2007 and nearly quadrupled our initial investment.