Andrew Kendrick: London “always” needs independents to challenge the Marsh/Aon hegemony
The London market needs its independent broking houses to provide alternative distribution and business sources rather than just relying upon the global heavyweights such as Aon and Marsh McLennan, Tysers’ new chairman Andrew Kendrick exclaimed in his first interview since returning to EC3 after four years away.
“It’s been demonstrated over hundreds of years that giving the client options and giving the insurer options is the right way to go, to have choice,” he added.
In an exclusive joint interview with Tysers CEO Clive Buesnel on The Insurer TV’s Leading Voices programme, Kendrick was discussing his return to the London market after retiring from his high-profile role as senior vice president of Chubb Group and executive chairman of its European operations in late 2018.
“There were several factors that drew me back,” he said. “One, it's a departure from being an insurer and becoming a broker. I've been an insurer for 40 years and I do believe that having an insurer's perspective can definitely assist the broker in understanding how to place business with an insurer.
“Secondly, the name Tysers, it's the oldest broker in Lloyd's, it's got a fantastic reputation and what critically made the difference to me, was the fact that AUB [the ASX-listed Australian retail aggregator] had bought Tysers – there’s no debt, no private equity”.
London’s independent brokers have become a favourite of private equity in recent years with the latter attracted to the low capital requirements and strong cash flow that brokers typically enjoy. But the uncertainty of ownership – as demonstrated by Tysers’ own drawn-out sale process under the stewardship of former owner Odyssey Investment Partners – high debt/finance costs and the relentless demands to consolidate can cause its own challenges, as Kendrick himself acknowledged.
“Frankly, if private equity was still owning Tysers, I wouldn't be interested,” explained the former underwriter, who also served in a number of senior market postings including the Lloyd’s Franchise Board and LMA.
However, since AUB’s A$880mn ($571mn) acquisition of Tysers finally completed in September 2022 (it was announced in May 2022), CEO Buesnel has been buzzing with enthusiasm regarding the “terrific trajectory” of the broker which can trace its maritime trading roots back to 1820.
“When you're selling a business, you're both running a business and selling a business; so I'm delighted I'm only doing one job not two, and a lot of my time can be about what I like doing, growing the business, being with a team, being with clients, being in the market, etc.”
Acknowledging the 18 month plus sale process was preoccupying, he added: “I think we're now in the spotlight for really positive things in terms of our future, the story we've got is a fantastic story, a fantastic future.”
As the second largest Australia/New Zealand intermediary, Tysers gives new owner AUB much better access to wholesale markets, products and capacity, he added.
“This is a really exciting opportunity,” said Buesnel. “And it’s really important to clients that they've got confidence they've got access through us to great capacity and placement.”
With over 800 facilities and binders, Buesnel views this part of the business as equally important and expects to make more of these products more available to Australian and New Zealand clients.
And momentum is already building. In November, AUB reported that Tysers saw revenues grow 9 percent during the first nine months of 2022.
Fight to win business
Echoing Kendrick’s earlier comments on the importance of the independent broker, Buesnel added that independence is also really important from a “culture and motivation” perspective.
“I love the fact that our brokers have to go out there and fight every day to win the business, be brilliant at servicing their clients – they can't take any business for granted,” he said.
“And all that drive and energy and hunger is in the culture and I think that is really powerful,” he added.
And this energy appears to be catching. During the interview, Buesnel predicts 20+ individuals – a mix of producing brokers and young talent coming up in the industry – will be joining Tysers in early 2023.
“People love a great story and they love a great place to work, and while I think we've always been a good place to work, it’s just been reinforced recently about what a great culture and a great fun and an entrepreneurial place it is to work.
“Now, we've got a great story about what our future is, so that combination is really powerful. So we're absolutely on the front foot around recruiting. We've already had more than 20 brokers agree to join us since we announced the deal and that's just indicative of how that has changed in terms of, people now want to come and talk to us as opposed to when you’re in the process of a sale which is difficult,” he explained.
In addition to the significance of the independent broker in the marketplace, both Buesnel and Kendrick said that while the onset of electronic trading has been transformational in many regards, face-to-face negotiation is still crucial.
“I'm hoping – as I say I’ve yet to get my feet properly under the table – that face-to-face negotiation has not gone,” said Kendrick. “I'm concerned that it's probably less than from when I was in the business, but face-to-face training needs to continue.”
Buesnel echoed Kendrick’s sentiment about getting the right balance between electronic trading and “the real”.
“There is such a uniqueness about the City, the relationships, the proximity, the face-to-face, etc. I was in Lloyd’s recently on a day it was packed and it was so good to see everyone there, the vibe was there. We need the old Lloyd's and all that tradition,” he concluded.
Watch the 11-minute interview with the new chairman and CEO of Tysers to hear more on:
- What tempted Andrew Kendrick back into the market following his Lime Street retirement
- A view on the market through the lens of the wholesale independent broker
- Growth opportunities for Tysers in 2023 following completion of AUB acquisition
- New hires