Michael Watson, chairman, and Mike Duffy, group chief underwriting officer, were interviewed in The Canopius Herald in March. This blog is a summary of that piece.
We are now rediscovering the spirit and purpose of Canopius. we have a complete sense of our own destiny, which is exciting for everyone, and we see a genuine excitement and desire to talk to us. Convincing our broker partners to continue to work with us was to be a priority, but at 1.1 we lost not a single piece of business. Instead, we gained some. We’ve had 100% support. Perhaps it’s because of a sense of an inevitable consolidation within Lloyd’s, which people fear will lead to depersonalisation. We are flying against that trend, so people are rooting for us. We offer an answer that isn’t a gigantic insurance conglomerate.
We are pursuing a three-pronged strategy that broadly responds to the challenges our industry faces. First, we have been focussing all our efforts on the things we think we are really good at. We exited areas where we were sub-par or sub-scale, those classes where we really didn’t offer significant value. Second, rather than expanding in the areas we are really good at by acquiring teams and infrastructure, we established a new division about six months ago that supports world-class individual underwriters. Arguably that will make us a lower-cost provider.
Third, we are developing in Asia Pacific and in the USA, where we have staff and the wherewithal to do more. The era when the London market was the world’s only go-to place is over and it is important to be realistic about that. Asia particularly will send much less business to London in the future, so we need to be on the ground there in strength. The USA is the largest market on the planet, so having broader access makes sense.
Looking to the future, we absolutely plan to grow. We are the largest privately owned independent business in Lloyd’s, measured by premium, but for us it is all about being the best, not the biggest.
We won’t need M&A to grow profitably for our investors. That said, if we identify an M&A opportunity that is ideal for us, we would investigate, and I am confident Centerbridge would support us. But our success is not predicated on acquisition.
In a year, what will be evident will be our speed, our ability to have a good idea and then just do it. As a small large firm, we can answer quickly, then move on. As you grow, you become slower. In a year, we will feel more dynamic, because we are moving constantly.
Posted on 24th May 2018.