Opportunity everywhere

Steadfast aims to reach new heights with a revamped leadership team and ambitious international strategy

By John Deex

It has been almost 11 years since broking cluster group Steadfast listed on the Australian Securities Exchange, and not even chief executive Robert Kelly could have predicted the remarkable journey it has been on since.

The group, formed in 1996 with 43 brokerages, listed in 2013 with a market cap of $534 million. It now has 425 network brokerages, 30 underwriting agencies, an ever-expanding stable of systems and platforms, and a market cap sitting above $6 billion.

But in many ways, it’s just getting started.

From left: Steadfast chief executive Robert Kelly, chief executive international Sam Hollman and chief operating officer Nigel Fitzgerald

Last year, former local AIG head Nigel Fitzgerald joined as chief operating officer, with his predecessor Sam Hollman taking the critical role of chief executive officer international. Mr Kelly believes these appointments will be transformational.

Also last year, Steadfast completed the acquisition of US broker network ISU Group. At $US55 million, it’s not the biggest deal in terms of cost, but Mr Kelly believes it has the most potential.

If Steadfast’s model takes off in the much larger US market, the next decade might deliver even more than the last.

Casting his mind back 17 years or so, Mr Kelly tells Insurance News the original plan was to float before 2007-08, when the global financial crisis hit.

“For some unknown reason, I woke up in the middle of the night,” he says. “And I’m thinking, the whole world is on fire with the stock market, there are some ridiculous prices out there. Do I really want to float this business into the hottest market we’ve ever had? Because, in my experience, there’s only one thing that could happen – it’s not going to double in size, it’s going to come down.”

So, he convinced a reluctant board to hold fire, and with the GFC sidestepped, the plan finally came to fruition in 2013.

The dominant reason for listing was to give Steadfast the capital to buy businesses within the network, and prevent brokers selling to competitors or being left stranded without a buyer.

The float was a success, but with it came huge responsibility, and a significant change in role for Mr Kelly.

At the time, he did not foresee the rapid growth that would eventuate, but looking back, he puts it down to some key principles.

“We had very simple guiding lines to be ethical in everything we did, and to have cultural alignment with the people we work with, and to never say something and do the reverse – to actually stick diligently to what was said to the market.”

Putting the client at the centre was also critical, as was maintaining positive relationships with insurers.

“I didn’t tell lies to insurers, I didn’t blindside them on things. I think that was the number one thing that allowed us to get growth.”

Mr Kelly believes a structure is now in place to accelerate further. The self-confessed “control freak” believes the appointments of Mr Fitzgerald and Ms Hollman will have a dramatic impact.

“I reflect on my stewardship of Steadfast and think I should have probably moved quicker in some areas to get people in.

“Nigel’s experience, skill and innate intelligence and honesty will make a huge difference to our business.”

On board … at last

Nigel Fitzgerald has long been admired by Mr Kelly, but it has taken a while for Steadfast to get its man.

He has had a long and varied insurance career spanning the UK, US, Asia and Australia, working for the likes of Liberty, Fairfax and AIG.

Mr Fitzgerald was working for a Fairfax subsidiary in London when his life took an unexpected turn. He tore his anterior cruciate ligament skiing, and while sitting on the couch recovering decided he wanted to “come home”.

In 2019 he took over the local operations of AIG, achieving profitability goals within three years, before last year finding “the perfect time” to join Steadfast.

Mr Fitzgerald says his leadership style is based on a background in competitive sport. “Growing up in Orange, NSW, there wasn’t much to do but play sport. I played every team sport you can think of, all year round, as much as you could fit into a week. So I guess I came into business with a highly competitive spirit, but one that was always team-oriented. My key leadership attribute is that I lead well through others, I can bring people together.”

Mr Fitzgerald says that after spending a year getting to know every corner of the business, he is now looking to execute on priorities. He already had a good idea of what Steadfast stood for, and it has lived up to his expectations.

“At my very first induction session, the recurring theme was that we don’t have an ego, we’re a holding company here to provide customer service for our members,” he tells Insurance News.

“And I just remember thinking, how good is this? The company I thought I was joining is exactly the company I’ve joined.”

Part of the attraction is the diversity of the business and the breadth of the challenge, Mr Fitzgerald says.

And he believes the success of the first decade since listing sets the company up to kick more goals – hailing Steadfast’s “forthright investment” in technology.

“We’re going to continue on the path that was put forward in those 10 years, but we now also have an enviable set of companies and networks and capabilities that just provides the next opportunity for the team.”

He says the “runway for brokers and agencies is significant”, pushed along by some key industry trends.

“The relevance of the broker is continuing to trend upwards, because customers require that advocacy with the insurers.

“There’s a complexity to what we do – buying business insurance isn’t necessarily easy. And I think consumers more and more, as their worlds are getting busier, are looking to a trusted expert to guide them through that.

“I look at our business and just see opportunity everywhere we are.”

The US is the key focus for Ms Hollman, who Mr Kelly says represents “a wonderful story”.

“To have one of our key women, who started with me 24 years ago, go right through the ranks and head up North America is exciting,” he says. “She will be successful, and make us successful.”

Mr Kelly, who has knowledge of the North American market through his long involvement with industry standards body ACORD, says the ISU purchase is exactly what he was aiming for, with representation in 43 states and a non-corporate feel that is strong on relationships. I’m not some dumbass Australian that hopped on a plane and went, ‘Oh, is that the Hollywood sign?’

“My understanding of what happens in that market is quite vast.

“If we believe that the foundations of what we’ve done here are transportable, then America will be extremely exciting.”

“I’m not some dumbass Australian that hopped on a plane and went, ‘Oh, is that the Hollywood sign?’ ”
Robert Kelly

Ms Hollman says the acquisition has been well received by ISU members and carriers, and is progressing well, with about seven members already expressing interest in Steadfast taking equity in their businesses.

How Steadfast assists ISU with technology is still being assessed, with learnings from other markets taken into consideration.

“We will direct our technology investment in areas that make sense for the US market,” she tells Insurance News. “That could be our tech, or it could be a version of our tech, that is still to be determined.”

As well as the US, Ms Hollman is responsible for Steadfast’s operations in New Zealand, Singapore and London, plus UnisonSteadfast.

She sees potential for growth in New Zealand, and business expansion in the London market. She also does not rule out further US acquisitions. But for now, ISU is her main focus.

Asked whether she believes Steadfast could be as big in the US as it is in Australia, Ms Hollman doesn’t hesitate.

“I believe it could. It’s such a large market. The US has 12-and-a-half times the population of Australia and the general insurance market is 15 times that of Australia.

“So you don’t have to have a really large percentage of it to actually be doing really well, and be bigger than the Australian operation.”

Mr Kelly bats away any suggestion that he foresaw anything like a market cap of $6 billion when Steadfast listed in 2013.

“I started this business with 43 scared insurance brokers who thought the international insurance brokers were going to wipe them out,” he says. “Our business plan was to survive the next month.”

But he adds his strategy was “pretty good”, the business made “virtually no mistakes in our acquisitions” and, most importantly, “we’ve done what we said we’d do”.

“In another 10 years, I’d like to still be one of the major players in the Australasian market. And I’d like Steadfast to be considered one of the best networks for you to belong to in the North American market.”

Watch this space.

Loyalty personified

Sam Hollman says that “like most people”, she fell into insurance, joining FAI in 1993.

“FAI is where I met John Phillips [Steadfast CEO from 1999 to 2010], who persuaded me to join him at a start-up called Steadfast,” Ms Hollman tells Insurance News.

“I didn’t enjoy the bureaucracy and red tape at FAI, and I wanted a nimble, progressive organisation where I could have ownership and accountability for my role and contribute to positive outcomes for a growing company. So I took the leap of faith to join Steadfast as their second employee, and the rest is history.”

During almost a quarter of a century, Ms Hollman has held various roles, including chief operating officer for seven years prior to her new position of chief executive officer international.