Insurance industry veteran John Charman is considering leading a takeover of a Bermuda-based insurer with the intention of managing it and diversifying its business.In an exclusive interview with The Royal Gazette, Mr Charman said a buyout was one of the options he was considering as he plans a return to the industry next year, following his controversial departure from Axis Capital Holdings Ltd.The Briton founded Axis in Bermuda in 2001 and served as its CEO for more than a decade, before he retired in May this year, to become the company’s executive chairman. The following month, he was ousted by the board.After what he described as “a monumental betrayal” by former colleagues, Mr Charman is turning his thoughts to the future.Independently wealthy and with no financial need to go back to work, Mr Charman is nevertheless determined to return to the insurance industry in one way or another.“I feel so deeply upset about the circumstances of what happened with Axis and I don’t want to retire from the industry in that way,” Mr Charman said.“I’m not going to do anything before Christmas, but I’ll determine in the early part of next year which direction to take.”He said there were two particular options on his mind.“The first option is that I could buy into an existing specialty insurance and reinsurance company — not only buy it but to take over the management,” Mr Charman said.“Many of the Bermudian companies are very US-centric. I could bring considerable international experience to the table and would substantially expand it by product and by geography.“I’m not looking for anyone to lose their jobs, but there would be greater pressure on the management team.”He declined to name any companies that might be in his sights.The second option would be to raise capital from investors to set up a new insurance and reinsurance company in Asia, focused on serving the Asian market and doing no US business. Ignoring the biggest insurance market in the world could be a selling point for investors, said Mr Charman, who has long experience of doing business in Asia.“Asian investors are very apprehensive about the US, from a regulatory as well as litigation standpoint,” Mr Charman said. Huge fines imposed on American banks were an example of why Asian investors were sensitive about US connections, he added.Mr Charman said he’d been able to raise more than $2 billion after 9/11 to start up Axis and was confident he’d be able to raise capital for a new project.He saw the emerging markets of Asia as having far greater potential for growth than developed western economies for the next two or three years.Contrary to the view of most industry observers, Mr Charman believes the industry is undercapitalised. He pointed out that rates have fallen substantially over the past few years, while risk exposures have soared and climate change was generating greater volatility in natural perils.“Our industry is not even the size of Apple — and that says it all,” Mr Charman said.The industry needs a greater number of product lines to meet the needs of the modern world and is not doing a good enough job of advising corporations on the complex risks they faced, according to the former Axis boss.The contraction of the broking community over the past few years had left expertise “too thinly spread to advise clients of the products they need and the risks they face”, Mr Charman said.Mr Charman also believed that the role of corporate insurance buyers — risk managers — had been diminished somewhat since the financial crisis, as cost-cutting companies looked to trim their insurance bills. Risk managers rarely went before the boards of Fortune 100 company boards — something which should be done as a matter of good corporate governance, he said.Bermuda boasted some of the best managed insurance businesses in the world, Mr Charman said. However, consolidation was desperately needed.“The industry is trading at the lowest price to book in my lifetime and that’s not likely to change over the next two to four years,” he said. “If companies can find a way of consolidating their businesses, while not losing their talent, emerging with a much stronger management team, a greater geographical footprint and a broader product base, then it would be in the best interests of everybody, including shareholders.”Mr Charman said he loved Bermuda and had bought a house on the Island.He added that he did not believe in work permit term limits and that getting rid of them would improve the Island’s appeal to international business.“From the day I came to Bermuda, I did not differentiate between Bermudians and non-Bermudians in any aspect of my life and I see no reason to change that now,” Mr Charman said.“I don’t like being called a guest worker. I have planted my feet on Bermudian soil and made a home here and I will do everything I can to make Bermuda successful in every aspect.”