Here to stay

Markel is looking to the long term with its Australian launch

By John Deex

Markel doesn’t want to be just another London player paying lip service to the local market – it has opened three Australian offices and empowered experienced underwriters on the ground in an effort to turbocharge its presence.

The global powerhouse is a significant player in the US and Europe, writing $US9 billion in insurance premium and another $US1 billion in reinsurance.
But it is Asia-Pacific – and Australia – that the company has singled out as a major opportunity for growth.

Managing Director Wholesale International Andrew McMellin – visiting from London to attend recent office openings – tells Insurance News the strategy is driven by demand.

“The US is growing, but not greatly. The UK and Europe is pretty stagnant. But if you look at the Asia region, post-covid, we’re seeing that growth come through.”

Asia-Pacific operations, led by Managing Direc-tor Christian Stobbs, have grown steadily to about $US140 million in premium. But Mr McMellin says an opportunity was identified to invest more heavily and accelerate that growth.

Australia – a developed and significant market with an appetite for specialty products – will play a key role.

Markel already wrote business here through its Lloyd’s syndicate and underwriting agency partners, but it wants to take the brand to a new level.

Offices have been opened in Sydney, Melbourne and Brisbane and key recruits have been announced as the team looks to grow to 15 or 20 people by the end of the year.

“We can make this sustainable across the piece, we can grow the business with the products that we know, and produce a business which can go from zero to, let’s say, $US100 million, in a three- to five-year period,” Mr McMellin says.

Leading, not following: Australia Managing Director Rory Morison

“We’ve got some really good products that we … think brokers and customers will want to see.”
Australia Managing Director Rory Morison

Australia Managing Director Rory Morison, recruited from Axa XL last year, can lean on past experience having assisted with the Catlin Australia launch in the early 2000s. Catlin was later acquired by XL, which was in turn acquired by Axa.

Mr Morison says Markel will not try to be all things to all people – and will initially focus on casualty, professional indemnity and directors’ and officers’ cover.

“We’re targeting business in that mid-market/lower corporate complex specialty space, getting empowered underwriters close to clients. In other carriers, a lot of authority has been pulled back to centre, with referrals getting longer and longer.”

He says the launch, announced in September last year, has been carefully planned and executed – never rushed.

“We’ve been using the time since then to build out the teams, and the product suites – designing our own wordings, our own pricing engines, from ground up.

“We’ve got some really good products that we can bring to market that we think brokers and customers will want to see.”

Other products will be added later and may include trade credit, marine and energy. Industry verticals and blended products will also be considered.

Key recruits include Ahmed Farag as Head of Casualty, Kym Beazleigh as Head of Professional and Financial Risk, and Lisa Mitchell as Head of Claims.

“We have a vision to be that leading specialty insurer in our chosen fields.”
MD Wholesale International Andrew McMellin

Mr Morison says the lines Markel has chosen to launch with have all faced challenges in recent years, but he believes starting with a blank slate gives it an edge.

“We don’t have a legacy book to worry about. We can be very thoughtful about the risks we’re looking at, but we can be quite creative with them as well.

“We’re not looking to just step in and follow the market on vanilla business.

We’re looking to lead, and some of those risks are complex and challenging, but certainly not insurmountable.”

He believes recent rate rises have made those lines more viable and profitable.

“There has been a lot of hardening, a lot of firming up of terms, conditions and rate. So actually, the entry point is a good one for us.”

Mr McMellin says Markel recognises that Australia is a regional market, and this sets it apart from other London players.

“Rather than putting one or two people in Sydney and seeing how it goes, we’ve opened offices in Sydney, Melbourne and Brisbane. A lot of Queensland business stays up there, the same for Melbourne.”

He believes a strong presence here will not only see it write more business locally but help grow the London book too.

“I think by being onshore, our brand will get more recognised. So when brokers are hearing from the London brokers, ‘We’ve got a quote from Markel,’ we’ll be more recognised, and therefore I do think we’ll grow the business in London as well as here. If we just end up with our London business being repatriated here, that’s not really success for us.”

Markel has set short-term profit goals for the Australian operation, but long-term success is more critical.

“I think when you look in a year or two years’ time, you’re going to see Markel up there, front of mind for a lot of corporate mid-market brokers because of what the team will deliver,” Mr McMellin says.

“I hope people will say we’re an empowered organisation that provides solutions to clients.

“We have a vision to be that leading specialty insurer in our chosen fields and markets. And we’re here for life, we’re building a business for the future.

“Whatever we get into, we have to make sure that we can see it through.”