Canopius is placing high value on local knowledge and personal connection as it pursues expansion plans

By Wendy Pugh

Locally empowered decision-making and in-person relationship building are the keys to expansion in Australia for London-based global (re)insurer Canopius as the business world in general leaves behind the pandemic-driven centrality of Teams and Zoom communications.

“Clearly, we’re all using technology and digital capability more than we’ve done before but fundamentally, we’re still a people business,” Asia Pacific Chief Executive Mark Newman tells Insurance News during a visit to the group’s new Melbourne office.

“Insurance is a service industry built around people and relationship, and I don’t think you can undervalue that.”

As well as opening in Melbourne, Canopius has this year employed a reinsurance team and made a string of key appointments. The company has grown to more than 30 people in Australia since establishing its first office in Sydney in 2019, headed by Claudio Saita. It expects to be close to 40 personnel soon.

Canopius took a look at its regional blueprint and made a strategic decision about six years ago to expand in Australia and New Zealand.

Previous industry experiences and feedback had shown Canopius leaders that local access, decision-making and underwriting empowerment is valued by brokers and clients, and that has become a cornerstone of the strategy.

“I was a broker for many years, and nothing frustrated me more than talking to someone who I thought was the decision-maker, but in reality, it was going to someone else, to someone else, to someone else, to get a decision,” Mr Newman says. “And often it would take a couple of weeks to get a disappointing ‘No’.

“Our model is very much about hiring really smart, well trained, locally connected people. And we empower them. We trust them with the underwriting capacity to make decisions based on their experience and knowledge of what’s happening in the local market.”

Canopius, formed in December 2003, was acquired in 2017 by a private equity consortium led by Centerbridge Partners, and has been growing ever since. Lloyd’s Syndicate 4444 is managed by Canopius Managing Agents and it also underwrites through a US excess and surplus lines company and has Bermuda reinsurance operations.

The group bought Lloyd’s syndicate 1861 a few years ago, broadening its capabilities in casualty and cyber classes and providing another growth engine in Australia and other markets.

“Australia now is already a third of our regional written business,” Mr Newman says. “It’s a very significant geography for the Lloyd’s community, but we want to concentrate on writing that business locally.”

Mr Newman was previously XL Catlin head of Asia and deputy chief executive Asia Pacific, while he has also worked for Guy Carpenter and as a property and casualty broker in the UK.

Mr Saita, Head of Australia and Pacific, joined from Tokio Marine Management Australasia, where he was deputy chief executive, and has extensive international experience. He says Canopius has a business model that’s both entrepreneurial and disciplined, and with a risk consultancy approach.

“We were always very reassured by the fact that if you look at the statistics, the general insurance market in Australia is consistently profitable, and is in fact extremely resilient.”

“I thought, in our first discussions, that there was an opportunity to set up a niche and specialty insurance company that would focus on retaining what is really good at Lloyd’s – the underwriting expertise, internal discipline – but then localise that in order to engage and serve intermediaries in Australia, in a way that other insurance companies probably don’t.”

He says underwriting and actuarial expertise is underpinned by digital capabilities to leverage operational efficiencies, provide solutions for the distribution of products, and enable access to data to better evaluate risk.

Canopius provides property insurance mainly through underwriting agencies, while its expansion in casualty has been primarily through brokers.

David Mutton was appointed in March to the Melbourne office as Casualty Underwriter for Asia Pacific, and it’s expanding product lines. David Hoffman was recently named marine underwriter, based in Sydney, and the insurer is launching professional indemnity cover.

The reinsurance team was recruited from Aspen Re after that firm decided earlier this year to close its Sydney office. Aspen Re now writes its Australian property and casualty business through its Bermuda and London platforms.

“It gave us an opportunity to pick up a really experienced, highly regarded and very successful local treaty reinsurance team, and to do that quickly, and without any potential legal conflicts and challenges,” Mr Newman says.

Canopius previously provided reinsurance in Australia from London, with support from the Singapore office. The local presence is expected to build on that footprint and drive additional reinsurance growth.

Andrew Parker has been appointed Head of Treaty Australia and New Zealand and Head of Casualty Treaty Asia Pacific. The team also includes Paul Wedlock as Head of Property Treaty, Australia and New Zealand, Casualty Treaty Underwriter Peter Mattei and Office Manager Liza Aparicio.

Mr Newman says there’s been a measured approach in regards to the Asia Pacific and Australian expansion as the group sets its sights on the long-term.

Canopius had previously developed a five-year plan, which Mr Newman says “we’ve absolutely met and exceeded by some measure, significantly here in Australia but also more broadly”.

And Canopius was always confident that could be achieved at a time when other Lloyd’s and local insurers were in a conservative phase and de-risking. Growth has also come from market hardening.

“We were always very reassured by the fact that if you look at the statistics, the general insurance market in Australia is consistently profitable, and is in fact extremely resilient,” Mr Saita tells Insurance News. “We felt that as a small entity coming into this market, we would find a way to build a profitable business in a niche of specialty capacity.”

As conditions have changed, some additional capacity, including from Lloyd’s peers in Australia, has become available in the market. But Mr Saita warns the rising interest rate environment has offered global capital other opportunities for favourable investment returns apart from insurance.

“Within this ecosystem we have to focus on what we can control and that is really positioning ourselves even more as a specialty insurance carrier of choice,” Mr Saita says.

“If we have the right people, if they’re empowered, if they are finding solutions for our clients, we certainly hope to be one of the first doors that people knock on when there is a need for risk transfer.”