The Buffet Way

The Buffet Way | Insurance Business

The Buffet Way

Each year, the new recruits at Berkshire Hathaway Specialty Insurance – from a 20-something fresh out of university in Sydney to a Paris-based senior executive with decades of experience – board planes in their home cities and fly to Connecticut. There, BHSI’s global leadership team details the company’s values, philosophy about the insurance industry and points of difference with competitors.

It’s an important step in ensuring that the business philosophies and values of Berkshire Hathaway CEO Warren Buffett and BHSI CEO Peter Eastwood become part of the DNA of every team member. Mark Lingafelter, president of BHSI Australasia, describes the annual ritual as “incredibly unique”.

“Unfortunately,   COVID   has   forced   change in our usual structure,” he says, “but it is a good example of our level of commit-ment  to  really  spending  time  and  helping  the team understand that there is a common set  of  values  that  sit  at  the  heart  of  the  company – not only to help understand what those values and practices mean, but to also help  the  team  understand  they  really  are  non-negotiable. So much of that comes from the  longstanding  philosophies  of  Warren  Buffett and Berkshire Hathaway.”

It  was  this  dedication  to  integrity  that  attracted  Lingafelter  to  BHSI.  His  values  and devoted work ethic have been constants in  a  30-plus-year  insurance  career  that  has taken him around the US, to Asia and even-tually  to  Australia,  which  he  and  his  family  now call home.

Global perspective

Lingafelter  grew  up  in  Shaker  Heights,  a  suburb  of  Cleveland,  Ohio,  where  one  of  his  first  jobs  was  as  a  caddy  at  Shaker  Heights  Country Club at age 15.“On  a  busy  day,  I  carried  two  bags  36  holes,” he says. “It was hard work for not a lot of money. On a good day, I pulled down $32.”

He  began  his  insurance  career  with  Chubb  shortly  after  graduating  from  Colby  College in Waterville, Maine, in 1983.“

My  senior  year  was  in  the  middle  of  a  recession,  and  my  thoughts  around  taking  a  short break after graduation and applying to law  school  seemed  less  realistic,”  Lingafelter  recalls.  “So,  for  practical  economic  consid-erations,  I  interviewed  with  a  number  of  companies  while  I  was  at  college  and  was  interested  in  a  small  property  &  casualty  company called Chubb and was lucky enough to join their training program.

”Chubb  initially  sent  Lingafelter  to  its  Dallas, Texas, office, but it wasn’t long before he was on the move around the US.

“While  I  was  always  in  the  same  area  of  the  business,  the  book  of  business  you  would  encounter  as  an  underwriter  from  city  to  city  was different,” he says. “In Dallas, I remember insuring  helicopters  for  the  military,  but  then  when  I  moved  to  Philadelphia  to  lead  a small  business  there,  we  were  dealing  with  a  lot more property risks. When I was in Tulsa, Oklahoma, I was getting exposure to oil fields and trying to get a better understanding of the storage  and  contracting  risks  in  that  market.  You  end  up  going  through  a  process  that  stretches you, and you start to get comfortable stepping  into  new  roles  where  you  wouldn’t  be  the  subject-matter  expert  on  day  one.  Probably the best example of that was to move overseas in the mid-1990s and take on a lead-ership role in Asia based in Singapore.

”In  Singapore,  Lingafelter  moved  from  product  leadership  to  country  leadership.  After overseeing Chubb’s Singapore business across  all  lines,  he  moved  to  Hong  Kong  to  take charge of the insurer’s business in Hong Kong,  Singapore  and  Thailand.  In  2005,  Chubb  offered  him  the  opportunity  to  move  to Sydney to run the Australian business.“

It’s  the  type  of  opportunity  you  accept  after  your  first  phone  call,”  Lingafelter  says.  “The  opportunity  to  move  with  my  family  to  Australia  and  take  on  the  challenge  of  a  business  that,  at  the  time,  was  close  to  50%  of  Chubb’s  portfolio  across  Asia-Pacific  was  a  once-in-a  lifetime  chance.  It  was  really  my wife and kids who decided, after moving around  a  lot,  that  they  felt  like  Australia  became  home.  For  the  kids,  over  time  they  really  felt  a  desire,  understandably,  to  put  down roots, and we were lucky to get citizen-ship in Australia.”

In 2015, Lingafelter left Chubb and joined QBE  Insurance  as  managing  director  for  Asia-Pacific.  Then,  in  2018,  he  was  offered  the  opportunity  to  run  Berkshire  Hathaway  Specialty Insurance’s Australian business.“I  spoke  with  Peter  Eastwood,  who  was  the  global  CEO,  and  Chris  Colahan,  who  was  leading  their  business  in  Europe,”  Lingafelter  says.  “They  spoke  about  their  long-term  focus  and  the  fact  that,  in  their  view,  winning  isn’t  normal  in  their  industry  and the importance of bringing a very disciplined approach to the underwriting process and the importance of operating with integ-rity.  I  was  excited  about  joining  a  company  that,  although  it  was  in  many  respects  still  a  startup,  had  at  its  foundation  these  prin-ciples  that  I  knew,  from  my  30  years  in  the  industry, were the correct way to run a busi-ness in a very challenging environment.”

Commitment to excellence

Lingafelter,   BHSI   and   the   rest   of   the   Australian  insurance  industry  have  faced  an  extraordinary  12  months,  between  the  historic  bushfire  season,  hailstorms,  floods  and  the  COVID-19  pandemic.  Lingafelter  believes  BHSI’s  culture,  business  philos-ophy  and  high  priority  on  values  –  taught  from  day  one  at  the  Connecticut  gatherings  – have been essential in guiding the company through this difficult period.

“So  many  companies  hang  the  value  statement  on  the  wall,”  he  says.  “What  is  rare  is  there  is  an  extraordinary  commit-ment to challenging our team to keep things simple  [and]  make  sure  we  are  engaging  and  checking  ourselves  in  terms  of  how  we  are  actually  showing  up.  Are  we  actually  behaving in a way that is consistent with the value  statement  for  our  company?  Are  we  demonstrating  respect?  Are  we  operating  with integrity? How effectively are we collab-orating  with  our  team?  There  is  a  commit-ment  to  excellence  that  runs  through  the  company that does make me feel fortunate to have joined Berkshire Hathaway.”