Howden accelerates plan to be credible global alternative for risk managers

Howden CEO José Manuel González

Howden, the london-based international specialty broker that is part of the Hyperion Insurance Group and 46% staff-owned, aims to become the leading Europe-based broker through a strategy of organic growth, acquisitions and hiring expert talent, CEO José Manuel González told Commercial Risk Europe.

The broker is building a fast-expanding network of offices, expertise, products and services that, critically, now enable it to deliver the full offering that risk and insurance managers with complex multinational organisations need and want.

Howden is positioning itself to be an independent alternative to the global brokers that are fast-shrinking in number, as Aon continues with its planned merger with Willis Towers Watson hot on the heels of Marsh’s recent acquisition of JLT.

Mr González laid out his ambitious growth plans as it was announced that Barnaby Rugge-Price has been appointed chair of the Howden group.

Mr González said the planned merger of Howden’s international retail network with its specialty and reinsurance group RKH, will provide customers with more simplicity and clarity, as well as easier access to the group’s expertise and global reach though its operations in 30 different countries.

He told Commercial Risk Europe that the consolidated platform and unified management team represents a “new era” for the broking firm. He said Howden is positioning the combined international broking business, that has $7bn in gross written premiums, for the next stage of its ambitious development, and seizing new opportunities that today’s evolving environment presents.

The CEO said there are now few options available for customers that want to deal with a broker that has broad expertise and access to key specialty markets such as London, Bermuda, Dubai and Singapore, as well as a serious global network of owned offices staffed and run by locals.

He said Howden’s continuing commitment to embrace change, invest in innovation and drive market transformation, means it is perfectly placed to service clients looking for a real alternative in a market where choice is diminishing.

“We are a global broker but act local. No single CEO of a Howden company is an expatriate – they are all local. We believe in the need for a local approach, but we also have access to all the international capabilities needed in London, Bermuda, Dubai or Singapore. It works like a perfect machine,” explained Mr González.

“When we have a CFO of a construction company based in Munich and they have a need for surety cover for their Australian business, we are able to serve that client locally in Australia, managed from Munich. This makes us different. Not too small that we do not have the reach or so big that we get in our own way,” he continued.

Mr Rugge-Price returns to the helm of the broking business from his recent position as CEO of Hyperion X, the group’s data and analytics arm. He will retain his role as executive chair of Hyperion X, with Paul Johnston named as its new CEO.

Mr Rugge-Price said of his new role: “This represents the ultimate affirmation of the rationale to bring together the RKH and Howden businesses into one group and now formally merge them into one company aligned behind one strong leadership team. I am excited to move back into the heart of the broking business with my Hyperion X experience, as we continue to re-evaluate ourselves to better.”

Howden continues to grow in Europe. It now has operations in 14 different European countries and partners in another 20.

The group recently announced, for example, the acquisition of Compensa, a Spanish flex and benefits business with a strong technology platform. This will further strengthen Howden’s employee benefits offering, an area that is increasingly falling into the risk manager’s remit.

Most recently the company was granted a licence to operate in the Belgian market, led by industry veteran Herman Kerremans, who was previously chief development officer at JLT in Belgium.

Mr Kerremans clearly has ambitious plans for the new Belgian startup. “The Covid-19 crisis has ushered in a rise in rates and a hardening market that will impact insurance programmes for many companies. Furthermore, given Howden’s ambitious drive, which empowers people to offer innovative and thoughtful solutions, we are perfectly positioned to offer clients in the region access to wider group resources and a fresh alternative in a consolidating broker market,” he said.

Louise Cable-Alexander, CEO of Europe at Howden Broking Group, suggested that further expansion across the continent can be expected. “Howden Belgium represents another significant investment in Europe as we continue to expand further and deeper into this important region. For clients, this exciting move demonstrates our quick anticipation of their need for choice and our commitment to delivering a specialty-led service on the ground,” she said.

The Belgian move came as RKH announced the appointment of 14 new senior aviation experts in London and Colombia, as part of the group’s wider plan to build the largest independent logistics team.

“All the time we are looking to see what opportunities there are for us to get closer to clients geographically and to offer them greater expertise across a range of product lines. We endeavour to ‘get out of our own way’ to make it easier for the client to access the expertise they need, wherever they need it. Expertise and geography are the perfect ‘binomio’,” explained Mr Rugge-Price.

Mr Rugge-Price explained that the new Howden will be able to offer risk managers working for a multinational corporation the full range of services.

“Our target customer is ambitious and forward thinking, like us. They want a broker with experience like ours, but one that also brings fresh, alternative ways of thinking. This is typically in the upper and mid-market segment – what we would call ‘a complex multinational client’, who requires access to a broad base of specialty expertise and London market knowledge, combined with empowered teams on the ground who understand local laws and jurisdictions,” he explained.

“In terms of what we can offer these clients, it really comes back to what we have been working on over the last nine months since we decided to merge our retail and specialty business. We can offer specialism – and by that we don’t mean just that we have lots of clients in a particular sector, by that we mean we have specific industry knowledge and a desire to get under the skin of our clients to truly understand what they need and so where we can help and add value,” he continued.

Mr Rugge-Price added that the broker can also offer its global distribution platform, but without the layers of management and process that sometimes frustrates customers with multinational requirements. “Our entrepreneurial culture means that our people are empowered to innovate for clients and deliver solutions. Everything we do is about providing simple and uncomplicated solutions for the client – this merger is an example of that,” he explained.

Another key element in the tool box for any broker keen to be taken seriously in the international corporate insurance space is the ability to service global programmes. Mr Rugge-Price said the structure being developed at Howden’s is designed to meet that critical need over time and as demand evolves.

“There’s an important balance to be struck. We’re aligned in terms of compliance and servicing across partners and our own offices internationally, but as clients’ needs change, along with the wider risk environment, we also have to evolve and we are constantly thinking about the best way to do this. As we’ve said, our main focus now is to ensure that our clients are able to knock on the door anywhere and access the expertise they need. This is a process that started internally and is a journey of continual improvement – merging the businesses together, strengthening the speciality connection for our retail offering without losing our local, market expertise and also maximising our Howden One network,” he said.

Finally, Mr Rugge-Price was asked how he felt the insurance market responded to the sudden arrival of the Covid-19 pandemic, particularly in the contentious area of business interruption coverage, and what it means for the future development of the industry. He focused on three key words that are fundamental to the future success of the sector: Trust, clarity and technology.

“It’s very unfortunate that there are, we believe, legitimate claims being held up in the legal system because, ultimately, we need to be finding solutions for clients and helping them manage their risks, not spending time stuck in legal battles. In the same way knee jerk blanket exclusions don’t help – we need to be more creative about how we manage risk and always put the client first. There is a need for clarity of policy form and it has also become obvious that the business interruption coverage currently in place is out of date and needs to be overhauled,” said Mr Rugge-Price.

“On the positive side, we’ve seen that our own investment in technology has worked well in enabling our employees to work effectively from home, and, for the most part, this has been borne out across the industry. There’s really no going back now, we have proved that we can work better, faster and cheaper by leveraging technology and digitalising the processes. We have to embrace that change,” he concluded.