At first glance, specialty insurance might not appear to have much in common with professional sailing or auto racing. But a key to success in all three is risk strategy – knowing when to make a bold play and when to play it safe.
Members of two Argo-sponsored sports teams, America’s Cup challenger Artemis Racing and Formula E’s Dragon Racing, say mastering risk-taking makes all the difference in a race. Similarly, by taking calculated risk in business, Argo Group CEO Mark Watson continues to transform the company through innovation, technology and a strong customer focus.
“We’re always mapping out the different options and ways we can go,” he said. “Some of them look a little crazy. But when you play them out, that’s how we’ve really advanced our business quite a bit over the last few years.”
Technology and risk
Using rapidly evolving technology to model risk before taking action is one parallel Artemis Racing Team Manager Iain Percy sees between competitive sailing and business.
“You are able to predict – in as accurate a way you can – that risk, and that’s the advantage that Argo takes into their business model,” said Percy, a double Olympic champion for Great Britain. “And it’s that brains and ingenuity that get them to value that risk in a way that makes them money, that makes return for their partners – but equally for us, it’s that measuring of that risk–reward equation that ultimately helps us win races.”
Argo collects exponentially more data today than it did five years ago, Watson said. The knowledge gained by analyzing that data makes transforming the company at a swift pace possible.
“The changes in technology are enormous right now, and that’s been what’s so exciting about our partnerships with Dragon Racing and with Artemis,” he said. “Because they are looking at quantum change, we’re looking at quantum change.”
Success is hard to achieve without risk, said Jay Penske, chairman and CEO of Penske Media Corporation and principal owner of Dragon Racing.
“I think you need to look at the opposite side of the coin from risk, and for us that’s reward,” Penske said. “If you eliminate too much risk in racing, I think you also eliminate the opportunity for reward.”
Fans see only Dragon Racing driver Jérôme d’Ambrosio in the car during a Formula E race, but he’s just one member of an entire team of professionals responsible for winning or losing on the track.
“There’s actually a huge amount of work in the background,” he said. “It’s probably the biggest team sport in the world. If one of these guys is not doing the job properly – or the driver makes a mistake or someone along the chain makes a mistake – you don’t get the results.”
Argo’s business teams are built to operate the same way.
“If you look at our company today, it’s just like running a high-performance sports team,” Watson said. “Everybody is dependent upon one another. Everybody holds one another accountable for performance.”
So while a team succeeds or struggles as a unit, it’s important to remember that risk also factors into individual roles, Percy said.
“In the way a business or a team globally can have a risk, so can every single individual within each company or each team as they make day-to-day decisions,” he said. “They are all at the cutting edge. That’s modern sport, technology, business. People are always trying their best. It’s always a daily risk–reward question.”
Argo sponsors high-performing teams that live up to the company’s commitment of sustainability, helping to raise awareness and support for sports that are gentler on the planet.
That shared purpose makes the partnerships especially meaningful, said Watson, who noted the light environmental footprint left by the electric batteries powering Formula E cars and the wind power harnessed by Artemis and other America’s Cup teams.
“Sustainability is something we’ve been talking about as a company and an industry for a while,” Watson said. “What two better fits for a company that is focused on sustainability than those two sports?”