“The insurance was great and all of that, but to be brutally honest I was making, at the time, $12,500 a year,” Falvey mentioned.
“My classmates were coming back from sea having made $75,000 a year and having the next four months off, paid vacation – so I said ‘hmm, something’s not right here’.”
The answer was simple: Falvey, a graduate of the US Merchant Marine Academy at Kings Point, New York, took to the seas with the US Military SeaLift Command, crusing as a primary assistant engineer.
It was a path that led him to London, the place, from 1983 to 1984, he served because the liaison officer to the Royal Auxiliary Fleet, shortly after the Falkland Islands War of 1982 that noticed Britain and Argentina locked in a fierce and lethal dispute.
It was household – or relatively the love of a lady and her response to his proposal – that set the wheels in movement for Falvey’s return to insurance coverage.
“She said ‘yes’, we got married, so I didn’t want to go back to sea,” Falvey mentioned. Instead of seeking to stretch his sea legs once more, he in the end headed again to Rhode Island, becoming a member of Donald J Rojas in 1984, the place he constructed the foundations for a long-running Lloyd’s relationship.
“I was essentially a cargo underwriter and we specialized in hi-technology – Hewlett Packard, Intel – I was writing a lot of that, and we started writing life science business,” Falvey mentioned.
“I worked with Don for about 12 years, and then he decided to sell the company to somebody else, so I started Falvey Cargo Underwriting in 1995.”
Building the enterprise
Perhaps fittingly, given his London hyperlinks and marine background, the enterprise Falvey now helms can boast that it’s the largest cargo covernote holder at Lloyd’s right this moment. As of 2023, family-owned Falvey Insurance Group contains 4 MGA companies – providing vessel air pollution, transportation and logistics legal responsibility, marine cargo and inventory throughput, and all-risk shippers curiosity insurance coverage – along with the wholesale division that launched final 12 months.
In the early days, although, the main target very a lot remained on hi-tech corporations and life sciences, and Falvey labored with a few of the greatest names in tech (from Amazon, then a bookseller, to Google) when the companies had been nonetheless of their infancy throughout the dot com growth days.
“I really focused on that and we continued to grow – we added some more underwriters, we opened an office in San Francisco, because most of our business was in San Francisco at the time in Silicon Valley, and then my mantra was: ‘if we’re going to be technology, we need to be in Asia’.”
Prioritising underwriting profitability
The group has 27 years of “almost consistent profit” for its underwriters underneath its belt, one thing that Falvey mentioned he believes is one in all his greatest achievements together with the group’s continued development – nevertheless it hasn’t all the time been completely plain crusing, and Falvey has made huge selections within the prioritisation of underwriting profitability, together with the shuttering of the group’s Asian operations.
“The mission of Falvey is to make money for our underwriters, and after five years, I never made money for our underwriters in Asia, so we closed that down and then continued to grow,” Falvey mentioned.
In 2017, Hurricanes Irma and Maria swept a path of devastation by way of the Caribbean (mixed trade insured losses from the 2 storms, together with within the US, hit $59.6 billion, based on Aon), and Falvey Yacht Insurance was on the time the biggest author of constitution yachts within the area, based on the CEO.
“Irma, and Maria came through and just wiped it out and it was = a very tough class of business before that,” Falvey mentioned.
“We continued to get support, but I just looked at it and said – ‘we’re not going to make money, we’re just not, we’re against the headwinds in what we’re doing there’, so I closed that, but in cargo and everything else, we’ve continued to make money.”
Looking to the long run
With underwriting profitability firmly on the prime of Falvey’s checklist of priorities, brokers shouldn’t anticipate to see the enterprise transfer too removed from its consolation zone – “you won’t see us writing D&O or anything like that, we’re going to stick to our niche,” Falvey mentioned – however it’s readily poised for additional enlargement inside its space of experience in 2023.
It has labored to maneuver with the instances by way of know-how, and Falvey estimated the group has round 18 programmers on its workers roster.
“I’ve been huge about technology – we have our own proprietary system, we’re big on that,” Falvey mentioned.
“Everybody that knows me knows we’re big on technology and data, but it’s still a relationship business, and you can’t lose sight of that.”
The CEO has not stopped increasing his personal horizons, and in 2020 he graduated from Harvard Business School’s Owner/President Management Program, the place he additional cemented his views on tradition.
“There was a lot of talk about strategy there, and you’ve got all of that and culture,” Falvey mentioned.
“One of the things I’m really big about is culture; culture eats strategy for breakfast every day, I’m a firm believer of that.”
As for what he hopes might be his personal subsequent huge achievement, Falvey mentioned: “We’ve been growing at about 30% a year now for the last four or five years, so we’re going continue to grow that, broaden that out and do more of that, and we’ve a company that’s built enough so that can continue on.”
Mike Falvey, Falvey Insurance Group CEO and president, on:
Lloyd’s modernization as a watershed second…
“Lloyd’s has changed so dramatically – the use of technology now and the speed at which things are [done]. I’m sure friends of mine in the market will be saying, ‘oh, it still moves kind of slowly’, but when you look back to where it was, with everyone sitting at the box, and the way people would progress – you would sit at the end of the box and photocopy. I have friends and that’s what they did for two years, and then finally they would get to move up a seat, and they would write in the book. And then they would continue to move a little bit further and they’d be involved in conversations and then 10 years later they would finally be making decisions.”
The return of the non-public contact…
“The private contact will come again just a little bit extra. I believe there are some brokers who’re having fun with not having to take care of underwriters, [and those brokers might be thinking]: ‘I just send an email in and then I get back 10 quotes, right?’
“One of the things I’ve cautioned them is: be careful what you wish for, because if your job is only sending an email to 10 markets and getting a response back, somebody in the US can just access London that way, or we can get a computer to access the markets that way. You still need to do that and have that personal touch.”
His prime piece of recommendation…
“Do the right thing. We all know what it is, right? We all sometimes try to take shortcuts. When something presents itself to us, we intuitively know what the right thing to do is. [It’s about] just having the courage to do the right thing, and then everything will play out. Do the right thing, trust in yourself, and it’s going to be good.”