Markel launches PI and makes intentions “crystal clear”
Markel launches PI and makes intentions “crystal clear” | Insurance Business Australia
Professionals Risks
Markel launches PI and makes intentions “crystal clear”
“We’re here for the long term,” says head
Professionals Risks
By
Daniel Wood
Earlier this month, Markel, the insurance operation within Markel Group, launched a professional indemnity (PI) offering for Australia. According to a media release, the coverages are focusing on professional and financial risks in areas such as renewable energy.
The launch is the latest round in the US-headquartered company’s significant expansion in Australia. In September, Markel’s boots on the ground presence began gathering real steam with the opening of offices in Sydney, Melbourne and Brisbane.
Rory Morison (pictured above), managing director for Markel International in Australia, said there were two reasons for opening three offices simultaneously.
“Firstly, we wanted to show intent because one of the big questions being asked is, ‘are you serious about this or not?’” said Melbourne-based Morison. “We also wanted to be crystal clear: ‘yes, we’re here for the long term.’”
The firm’s new local leader and Andrew McMellin (pictured below), Markel’s London-based managing director for wholesale international, explained their strategy to Insurance Business.
Big APAC expansion plans
McMellin said Australia is an important part of Markel International’s Asia-Pacific (APAC) expansion plans. This region’s business, he said, is currently worth about US$140 million. The aim is to convert that to US$500 million during the next five years.
“That’s by growing out all our key locations in Asia,” said McMellin. “For us, that starts in Dubai, runs through Mumbai in India, goes through Kuala Lumpur in Malaysia, Hong Kong, Shanghai, Singapore and now we’ve added Melbourne, Sydney and Brisbane.”
Morison suggested that having a strong physical presence is important in “a highly regionalised market” like Australia’s.
“We wanted to get as close to the customer as possible and that’s been one of the hallmarks of the Markel International expansion over the last few years: getting into those closer customer markets,” he said. “A lot of what we’re seeing [in Australia] won’t leave the state where the client is based.”
Importance of local claims handling
Morison said Q4 of last year was used to hire underwriters able to trade in directors and officers (D&O), PI and general liability. He expected the total number of staff to reach 20 soon.
“We’ve also hired a head of claims,” said Morison. “That was, again, deliberate because one of the questions we’re always asked is, ‘who’s handling the claims? Is it going offshore?’”
He and McMellin emphasised what they see as the importance of local authority to make coverage decisions.
“Like the underwriting, the decision making and empowerment will be onshore and local,” said Morison.
Singapore inspirations
McMellin said the firm’s success in Singapore was the inspiration for the moves in Australia. After “a few problems on the way,” he said Christian Stobbs was hired to lead the Asia-Pacific operation from Singapore five years ago.
“We started to evolve the model, bringing in empowered underwriters and really invest in the underwriting talent and giving them authority,” said McMellin. “We basically grew [APAC business] three-fold in the last four or five years.”
The same approach, he said, is being applied Down Under.
“We recognized again, if you have people on the ground domestically, you will see business that you won’t see elsewhere,” said McMellin.
In Australia, Morison said Markel has hired locals for underwriting roles because they understand the insurance scene here including “nuances between the states in certain products.”
Morison himself, despite being of British origin is practically Australian. He has lived here and worked in the local market since 2010.
“A lot of insurers talk about empowerment,” he said. “We’ve hired people that will have the same authority as counterparts elsewhere in the world.”
Morison said this makes any “referral chains,” where they exist, very short. “That’s key for us and we feel it is a key differentiator.”
“Breaking the mould” Down Under
Australia has also involved “breaking the mould” compared to most international insurance operations, said McMellin. Markel has established an international casualty operation locally.
“Why start it in London? Why can’t you start in Australia if you’ve got talented people?” said McMellin.
Morison said they already had the advantage of familiarity with the local insurance scene.
“We already write a lot of Australian business out of London so it’s not an unknown quantity,” he said. “I think, Australia as a market, particularly through the Lloyd’s model, is very well understood in the London market.”
Promising signs
As a business, Morison said his firm takes a very long-term view.
“The long horizon that Markel as a business looks at for success, is to be a forever company,” he said.
So far, he suggested, the early signs Down Under look promising.
“The response we’re getting both on the broking side for being solution-orientated and from the underwriting side as well – where a lot of authorities and referrals have tightened up in the last few years – has also been incredibly encouraging,” said Morison.
Are you an international insurance business operating in Australia? What do you see as the local challenges? Please tell us below
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