Now we are 5…

No, we have not reverted to our childhoods and to counting on our fingers, dear Reader! Rather, the Awbury Group has now reached a robust and bumptious 5.

And in that eventful 5 years, the Golden Tree has grown from a seedling to a strapping sapling. It has been caressed by zephyrs and withstood storms, becoming stronger and more resilient than ever. We expect it to continue to grow and increase its span, because we are focused on building a sustainable Awbury franchise across our E-CAT (Economic and Financial Catastrophe Risk Insurance) domain.

So, we would like to take this opportunity to thank all of our clients, reinsurance partners and advisors who believed in our concept and business plan, and who have supported the Awbury Team in its implementation over the past 5 years. In all seriousness, we could not have achieved what we have without you.

In addition, we would like to express our appreciation to our regulators. We are very cognizant of the fact that we operate within a regulated environment, which requires mutual trust and respect.

While Awbury was conceived in the wake of the Great Financial Crisis, and one could be forgiven for wondering “when will it end?” in light of the continuation of slower growth, distorted asset prices and the dislocating effects of regulation, let alone “Brexit” and the outcome of the recent US elections, in reality we believe that the future holds much promise for a business such as ours, as the economy evolves, and new centres of financial and transactional activity emerge. All this will require new insurance products and risk solutions, which are Awbury’s focus and specialty.

Why? Human nature and ingenuity have proved, so far, able to address and manage repeated shocks, some of them potentially existential. However, progress is never smooth nor linear; but tends to come in bursts and even contain regressions. This means that, to survive and prosper, one needs to remain fully aware of one’s environment and the factors that can threaten survival, while also being open to opportunities as they present themselves. We may be millions of years away from the East African savannah, but many of our instincts and subliminal influences remain.

Therefore, as we have written before, the Awbury Team pays great attention to underwriting the opportunities presented to us in a way that ensures that we minimize the risks of “groupthink” and “framing”, which can mean that insufficient weight is attributed to the tail risks that are inherent in our E-CAT franchise. As the Great Financial Crisis and recent events have demonstrated, in the area of geo-political, economic and credit risks, the tails are often somewhat “fatter” than models predict; or models, being stylized and the product of insufficiently robust inputs, simply fail to account for what happens in the real world.

Furthermore, we are somewhat obsessive about ensuring that, in everything we do, there is a proper alignment of interests and appropriate allocation of the economic risks and rewards. We achieve this by focusing on business where we can add value and provide solutions for our clients, eschewing situations that are commoditized or “standard”. We are most assuredly, not the “dumb money”! We will simply walk away from anything that hints of that.

Of course, we are not so naïve nor smug as to believe that we are infallible. We have a healthy respect for the view that “only the paranoid survive”; and are always testing our assumptions and beliefs to ensure that we are not caught out by changes in our environment.

So, in conclusion, we are grateful for whatever success the past 5 years have brought us; and will be judicious and proactive in making sure that we maintain our momentum and growth.

The Awbury Team


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