Jeffrey Mack, chief executive officer of the GHL Group

Jeff Mack joined the Providence Washington Insurance Group in May 2004 as president and chief executive officer of its four insurance companies: Providence Washington Insurance Company, York Insurance Company, American Concept Insurance Company, and Providence Washington Insurance Company, New York. He simultaneously served as chairman of the board of the insurance company’s parent organisation, PW Acquisition I, LLC, and the four insurance companies at a time when the insurance companies were in great turmoil. Shareholders’ equity had fallen from US$105 million in 2001 to US$48 million by the end of 2003 due to over expansion and under reserving. Outstanding debt at the holding company level stood at over US$70 million. Mack’s job was to stabilise the company and develop strategic plans to either recapitalise the company or sell it.

It was decided to reorganise the company while placing it into a self-administered run-off: it stopped writing new business, restricting itself to servicing claims. Costs were drastically cut. Six branch offices were closed. The staff was reduced by 80 per cent. By the end of 2004, shareholders’ equity, due to one-off restructuring charges and additional reserve strengthening, was US$27 million. Between 2004-2005, Mack approached a number of potential strategic partners and private equity providers. Given the complex capital issues of the holding company and the uncertainty surrounding the company’s loss reserves, no one was able to offer the majority shareholder commercially viable terms.

Mark changed tack and, with the blessing of the majority shareholder, initiated a management buyout. The plan? Transform the company from an underwriting company to a third party insurance service provider, specialising in insurance claims adjusting, and run-off management, by leveraging the company’s core skill set. Mack, together with a large private equity firm and a local insurance executive, conceived a plan that the insurance regulator accepted for the transfer of control of the company to the management buyout team, and negotiated a sale of the company with the majority shareholder. Terms of the sale: purchase of all of the common stock of the insurance company, assuming the holding company’s debt, which had grown to more than US$80 million.

Concurrent with the closing sale, Providence Washington Insurance Solutions, LLC (PWIS) was established as a third party claims administrator. Its first contract was the continued management of Providence Washington Insurance Group’s run-off. The former insurance companies’ employees were now working for PWIS. Mack developed a plan to restructure and recapitalise the insurance company’s holding company debt to relieve any potential threat of bankruptcy. According to Mack’s resume, the Providence Washington Insurance Group is returning to financial health. Since the insurance companies were placed into run-off, shareholders’ equity grew more than 50 per cent. Loss reserves were stabilised. “The majority of the holding company’s debt is now controlled by Mack and his partner, and the threat of bankruptcy has been removed,” his CV stated.

Swiss Reinsurance

For the 18 years prior to joining Providence Washington, Mack worked for Swiss Reinsurance. He was managing director and chief operating officer of Swiss Re’s Financial Service Business Group (FSBG) in Zurich, Switzerland. When he left, the company had US$3.5 billion in revenue. FSBG’s business included direct property and casualty, aviation, and credit insurance, structured finance products, private equity investment, third party asset management, investment banking, and a securities broker/dealer.

In 1997, Mack was named managing director of Swiss Re New Markets where he was an executive team member and later, chief operating officer. Other past board participations include Swiss Re Capital Markets, Japan, and Swiss Re Capital Markets, UK, as well as Swiss Re Financial Services, Barbados. Mack, who is fluent in German, started his insurance career as a management trainee at Crum & Forster Insurance Company in 1980. Mack has a communications degree and a MBA in finance from Fordham University. He also has a chartered property and casualty underwriting (CPCU) degree.

http://guardian.co.tt/business/business-guardian/2009/04/22/meet-jeff-mack