BHSI France shifting to lead position as market continues transformation

As AMRAE members gather for their annual Rencontres in Deauville, Commercial Risk’s Adrian Ladbury discussed how BHSI will make further gains in the French market after an impressive start with the firm’s country manager François-Xavier d’Huart. 

François-Xavier d’Huart joined Berkshire Hathaway Specialty Insurance (BHSI) as country manager in France in June of 2019 and found himself in a brand new office all alone and in need of a team.

Some may have found that experience daunting, and rightly so. But the man who joined from AXA XL, where he had been head of client and broker management for France, found it exhilarating. He was certain that other talented and well experienced French insurance market experts would be sure to follow and join the latest BHSI operation in Europe.

When Warren Buffett announced the formation of BHSI in the early summer of 2013, he neatly summed up what attracted d’Huart to the adventure and what would inevitably attract talented staff, brokers and, ultimately, customers: financial strength and reputation, a long-term commitment and the ability to make local decisions at the pace customers were finding so difficult to secure.

Back in 2013 the sage of Omaha typically did not mince his words when he announced that BHSI was underway and ready to do business in what was then still a highly competitive and stubbornly soft market.

“It’s official: We are moving into commercial insurance in a substantial way, and we are here to stay. With our proven underwriting discipline and financial strength, along with a stellar management team, Berkshire Hathaway Specialty Insurance is a welcome solution for customers seeking large-scale property and casualty capacity for the long term,” he said.

That “stellar” management team, led by former AIG star Peter Eastwood as president and latterly Chris Colahan, head of UK and Europe, was a critical attraction for d’Huart. He saw the chance, with the right team alongside him, to build something significant in a very traditional insurance market that was undergoing a process of swift transformation.

The timing was sweet.

“I started literally on my own but three months later had attracted a really talented team who joined me on this amazing journey building something unique. Our goal is to create a market leader here in France as elsewhere in Europe and worldwide. We can do that because we have amazing assets. But perhaps just as important, we also have a unique culture and vision that is shared from the top to the bottom and is consistent,” explained d’Huart.

“My main challenge was to gather a dream team and, to be honest, it has been easier than I originally expected. I thought I would have to sell the company and convince them but that was not the case. And once the first team was on board it became even easier to attract others because they were reassured,” he continued.

Direct and short lines of communication were, and remain, key to d’Huart in a market where communication is often so blurred, and decision-making at a local level difficult and frustrating for brokers and customers.

“A big factor for me is the freedom given to local organisations within BHSI and, at the same time, the opportunity to discuss and share ideas with top management and subsequently act swiftly when needed,” he said. “Integrity and collaboration are key to having that local freedom without sacrificing culture and discipline,” added d’Huart.

The timing of BHSI’s arrival in France was, of course, blessed as the market was in turmoil and customers and brokers were desperately in search of credible options. The Berkshire Hathaway brand was an obvious advantage in such a market.

“A lot of players were not offering best service and were overly complex, and processes were becoming more and more drawn out. This became even worse in 2020 and 2021 as the market really started to harden. Added to the poor level of service on offer, this created a great opportunity for us. This was pure luck really but when you are lucky you need to grab the opportunity and maximise it. We managed to grow substantially in the first years and in a profitable way and recruit, so that now we have 32 employees,” explained d’Huart.

Now the really hard work starts as the market begins to calm down and BHSI France really starts to push its offering as a primary lead player and become a credible option in the complex world of global programmes.

“The market is slightly different now. Conditions are still good but the established insurers are fighting hard to keep their business and being more flexible on terms and conditions, if not so much price. This makes it more difficult for players like us that are dependent on new business that currently represents about 30% of our total gross written premium,” said d’Huart.

“Also, after two years of desperately searching for capacity, the brokers are more happy to keep the programmes where they are, especially primary layers; there is more stability in terms of the incumbents. But we have quoted a lot of business on the primary layers at the latest renewals and need to continue to stress our value proposition, which we know is different and better than the others, to the brokers,” he continued.

The French head said that BHSI’s financial strength is obviously a big selling point. But d’Huart also stressed that perhaps more important is the company’s ability to offer stable terms and conditions and be a true long-term option. This is not a short-term cyclical sell. One of the reasons for this unique selling point is the fact that BHSI it is not reliant on reinsurance. “We offer terms and conditions on a net basis that customers are very happy to hear. Likewise with claims. If we have a big claim we do not need to ensure the reinsurers will pay up. We can just pay the claim,” explained d’Huart.

With BHSI’s core proposition being “claims is our product”, the ability to shift towards being more of a primary rather than excess player in 2023 is even more important. Clearly it is more difficult to demonstrate your commitment to paying valid claims swiftly when in an excess layer.

One obvious way to crack the primary lead market is to offer a credible global programmes capability, something that remains a pretty rare commodity in today’s market. Thankfully for d’Huart and his peers within BHSI, the group has made that investment and now has on the ground operations in 15 core global territories and has built a global network of partners.

“We have launched a new international platform for multinational programmes and believe that we can now compete in this specialist field. This has been shown by the fact that our customers are using it,” he said.

The key in this area is process, and d’Huart said that one of the biggest advantages of being a ‘start-up’ is that new teams can bring experience of best and worst practices from elsewhere and build something that really works. Another advantage of being new is that BHSI is not struggling to plug together numerous legacy systems across the globe to deliver the reports and service that customers need.

“Some of the competitors have developed fancy apps. We have focused on the accuracy of data and delivery, which is daily for the customer. For me, this is clearly where our customers are expecting us,” said d’Huart.

These core strengths, a focus on claims and non-reliance on reinsurance, will be critical over the coming months as the market continues to ‘re-set’. But for d’Huart, the spirit and culture of BHSI and the staff who have joined the adventure will prove to be the deciding factor.

“We have built a team of entrepreneurs who have left traditional established companies because they want to create and do something different from the mainstream market. The main feedback we get from brokers and customers is that our underwriters are really easy to deal with. We have not had to re-underwrite an existing book of business, and customers know we are here for the long term and can build up that critical level of trust that is more difficult for others that have different investors and models,” he concluded.

 

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