Howden Tiger’s Richardson: Talent strategy unfazed by GC $70mn poaching settlement
Elliot Richardson, vice chairman of Howden Tiger, has no intention of slowing down the reinsurance division’s recruitment drive, telling The Insurer TV that while there are always “regrets with these things”, he won’t apologise for Howden Group being “a magnet for talent”.
It’s been two weeks since the high-profile out-of-court settlement between Howden Group and Guy Carpenter over the defection of 38 Europe-based former Marsh McLennan employees to the UK broking group was announced.
While terms of the settlement were not revealed at the time, Marsh McLennan has since reported that it settled a claim with an unnamed competitor for $70mn related to the “unlawful recruiting”, an accusation Howden Group apologised for in a statement following the settlement.
“I'm sure there were sighs of relief on both sides,” said Richardson while discussing the outcome in part one of a wide-ranging interview with The Insurer TV.
“I think as an industry, it's up to us to try and settle these matters in a different way and I think it has to be about leadership, and when it came to the apology, and if that's what the other side wanted, I made sure I personally put my name in, so I volunteered. That's about leadership.”
As to whether the broker needed to rethink its recruitment strategy moving forward, Richardson was adamant the firm won’t stop targeting talent from rivals.
“Absolutely not. That's not what we're doing,” he asserted. “We've gone from zero, three years ago, to now being one of the four major players in this industry. Other people took 30 years to do this and we're a magnet for talent.
“People want to come and work for leaders. I think there's now a distinct difference in the industry between professional managers and entrepreneurial leaders, and I think Howden is the home of the entrepreneurial leaders,” he said.
While $70mn is almost certainly a record out-of-court settlement, Richardson said it doesn’t change the firm’s expectations on how the new arrivals perform.
“If you look at it from a sporting analogy, it's not their position to set any form of transfer fee. They go and focus on what they're doing on the pitch,” he said.
“When we build a business, we hire people to come and build that business with us. When we hire somebody, we say right, you've got the opportunity to build your own budgets, build your own business plan, take your time to build this properly. So actually, it's the absolute opposite of what people would normally expect in insurance.
“We do not hire people to build revenue. We hire them to build a business,” he added.
Challenging the status quo
Richardson – who was himself involved in a high-profile team move when he took many of his Benfield fac team to rival Aon in 2006 – rejected the idea that the big brokers were giving Howden Tiger a “rough ride” over its recruitment strategy.
“I think it is the other way around. I think we give them the rough ride,” he said.
“I think if you've sat for 25 years and you’ve had three people competing with nearly 90 percent market share, then [what we’re doing] provokes a reaction. But we don't personally believe that we were ever going to go into this and not expect a difficult reaction from the status quo – you'd be out of your mind to think otherwise.
“But we have no fear of doing that because we're trying to develop the best talent, the best tools, and everything else. And that's clearly reflected in the growth and the speed of what we're able to do.”
Howden Tiger predicts revenues will reach $600mn in 2024 versus a modest $60mn in 2020. Of course, the ~$1.6bn acquisition of TigerRisk has played a significant role in this growth trajectory, but Richardson said it’s also about giving the market more choice.
“It can't be a war if there's only one side in it,” he said. “And at the moment, it is clear that people see Howden Tiger as a choice, both on the client side and on the people side.”
US retail opportunity
So, where next to conquer? For Howden Group, there are suggestions that a move into US retail could be an obvious next step.
Richardson didn’t outright deny the speculation, but added: “We continually look at all of our different options as a company, but I think it's also important to remember we already have two great businesses already in the States. You mentioned Tiger. We've also got Dual, which is going from strength to strength over there. And I think we'll continue to look at all of our options as we grow our business.”
He concluded: “I've nothing more else to add to that other than it's clear the US is a fantastic market. We also have a lot of big relationships already there. Whatever we do, we will be very careful in our thought process.”
Watch Part 1 of The Insurer TV’s interview with Howden Tiger’s Elliot Richardson in full to hear more reaction from the settlement and how this positions the intermediary among its peers.
Part 2 will be out on Monday, during which we cover market conditions, the MGA sector and the burgeoning fac space. Stay tuned…