Onwards and upwards–Brokerslink

Adrian Ladbury (AL): What is the background to BrokersLink? How and why did you evolve so rapidly without external funding? José Manuel Dias da Fonseca (JMF): BrokersLink was born in Portugal in July 2004, formed by MDS in Portugal, Artai in Spain, Pérouse, First Assur of France and Lazam-MDS in Brazil. The vision for BrokersLink is to provide outstanding service to clients worldwide, responding to the demands of an increasingly competitive and global market. It started as a small group of members who had to compete with the big guys. One of the most important competitive edges was to be global to help service our Portuguese customers’ increasingly international needs. We also had a rising number of European customers outside of Portugal in France and other countries. So we needed alternatives. To start with the group of four partners were mainly focused on Europe and Brazil but the direction was clearly going to be global from the start. AL: How did you become truly global? JMF: In November 2007 we officially created the Associação BrokersLink (ABL) to become a key player in the global insurance market and an alternative to the large global brokers. At that point BrokersLink gathered some 40 independent brokers across over 50 countries and managed more than an aggregated $4bn in premium.hideThen we met other similar brokers in Asia and Latin America and began to focus on these markets. In November 2008 PanAsian Alliance, the network of Asian brokers that was created in 2005, and Alinter, the South American network of independent brokers formed in 2000, made the decision to operate under the single BrokersLink brand as one global network. As I travelled around the world and met other independent brokers I found that we had similar DNA wherever we were. In 2009 leading US independent broker Frank Crystal joined the network and we went truly global. We officially relaunched with a new brand identity and held our first international conference in Hong Kong. AL: What about other services? Risk managers with cross-border exposures and coverage requirements demand more than just transactional placement services, they also want services in other risk-related areas. How do you deliver this? JMF: We expanded the membership to include other key service providers to deliver just this for customers. We now have a formal relationship with some 15 expert service providers including AIR Worldwide, the catastrophe modelling firm, American Appraisal, the global loss adjusting firm, Herco Risk Consulting, which is part of the MDS Group, Safeonline, the cyber security experts, and Towers Watson, the human capital and risk consulting firm. We even now work with a US law firm and so have a great range of expert advisory firms. This is another thing that makes us different to other broker networks. We are not just defending our business by using opportunistic tactics. We are looking for new business and have very aggressive DNA throughout the network. AL: Why did you decide to incorporate the network? How does this help improve the offering for customers and win new business? JMF: We made a very important decision at the end of 2013 to transform BrokersLink from a not-for-profit commercial partnership into a formal, profit-oriented operation. We have created a holding company and incorporated in Zurich and will launch the stock offer to all members at the end of the year. The objective is to create a new model for the market, creating a unique alternative. We are different as the model does not exist anywhere else. We are raising capital to fund further investment that is focused on a significant new business development push, a central management structure and investment in IT, such as a global software system. We also need to invest in branding and PR. So this will happen in the first half of 2015 and we will probably end up with 40 to 60 shareholders. AL: Is there not a danger that the new structure will damage what has so far been a very successful partnership system? Will it stifle the dynamism and focus on customer care that the independent network structure fosters? JMF: We do not want to kill independence and the entrepreneurial philosophy. Our members are strong, dynamic and business-oriented companies. There is a great culture within the network. Over the last 10 years or so we have worked hard to ensure that all members are very motivated to work together. The success of BrokersLink is largely based on the human relationship basis of the network and the level of knowledge. Everybody knows each other and there is a big alignment of culture. One important benefit of incorporation and raising funds through the stock offer is to invest in IT. This is so important nowadays, especially for global customers. If we retain the close relationships with each other and customers and this is supported by the best possible IT infrastructure then we have the best of both worlds. AL: What about your relationship with the insurance market? How does this work? What advantages do you believe you have over your big rivals such as Marsh, Aon and Willis? JMF: BrokersLink partners with many insurance market leaders around the world. We manage a significant premium volume with major insurers and this provides the leverage the network needs to deliver competitive and quality insurance programmes to clients. The network has strong partnerships with AIG, Zurich and XL Group. We also have a strong relationship with CooperGay, one of the world’s leading wholesale and reinsurance brokers [MDS owns 10% of CooperGay]. These partners work actively to support BrokersLink members’ development efforts with training programmes, international database access and co-branded products. These partnerships are crucial to the development of the global alliance and the goal is to establish a prosperous collaboration for all involved parties. But this club is not closed. Many other insurance brokers and captive in-house brokers also use BrokersLink as a platform to provide global risk management and insurance brokerage services to their multinational clients. At our recent conference in Venice there was a record turnout of over 270 members from over 70 countries. Our keynote speaker was Mike McGavick, CEO of XL. The big insurers take us seriously. AL: So presuming the stock offer is successful what is next on the agenda for BrokersLink? What will differentiate you from the big listed global brokers such as Aon, Marsh and Willis and the other broker networks? JMF: The focus for the next two years will be to develop a continued stream of new business. We are different because the global brokers have offices worldwide but they are vertically structured. The other broking networks are completely horizontal and essentially designed to protect their own business. We are something in the middle as we retain our entrepreneurial spirit and independence but with shareholders we will also create a vertical alignment and an even greater commitment to the cause than before. I believe the mix between the two will help develop new business but at the same time retain the service culture, close relationships with customers and, of course, the local knowledge that is so key in the global insurance business. We have a very regional board with directors from each continent and the whole structure is built from bottom to top which means people feel very integrated. This is very clear when you attend one of our events. We are very close and contact between different brokers is very easy and important to us. AL: I have been told many times by risk managers that they prefer working with independent brokers because they feel that they receive better service and continuity of contact. But they feel that they have to work with the big, listed multinational brokers because they are a ‘safe bet’. If anything goes wrong the risk manager can’t be blamed for choosing an ‘unknown’ name. Will your new status help overcome this objection? JMF: It is true that some multinational customers feel that they have to work with the big groups for the reason you identified. But the reality is that there are credible alternatives and BrokersLink is one of those alternatives. We can guarantee the same skills and capabilities if not better and we offer a much more client-focused service and easier access. Access and quick reaction speed is very important to customers nowadays and we can offer that. In Venice our Irish partner shared an interesting tale. He said that he had an IT client in Dublin that had just opened an office in Singapore and forgot to tell the broker. He realised that he needed to sort insurance for the new office but did not know how to go about it. Our Irish partner told him that he would sort it out and someone would turn up to help in the morning in Singapore. The Irish customer did not believe it would happen, but of course it did. Our partner in Singapore was there the following morning to start the process. This does not necess-arily happen in much bigger and bureaucratic organisations that can also suffer from internal competition which all leads to delays. We are building a broking organisation that is specialist and delivers service but does not suffer from such stereotypes because it retains the entrepreneurial spirit and attention to customer needs. Also customers do not suffer from people always moving around to different departments and territories. AL: You announced a change in the structure of BrokersLink recently in which you split the former Europe Middle East and Africa (EMEA) region into two separate regions–Europe and Middle East and Africa (MEA). Why did you do this? JMF: This change was made to enable BrokersLink to build closer relationships with local clients and tailor its service delivery to match the different needs of each region. The Middle East and Africa are very different economies with different needs and so we decided to reflect that with a new structure. As part of this move Jacqueline Legrand, CEO of MDS Portugal and previously regional director of the combined EMEA region, will focus solely on Europe. Youness Rhallam, CEO of Moroccan broker Alpha Assurances, was appointed regional director of MEA. Youness will be closely supported in this key role by Tiago Mora, CEO of MDS Angola, Maely Daoud, director of Filhet-Allard in France, and Cyril Haddad, regional CEO of Egypt-based Hadbrok Insurance Brokers. The African continent in particular presents enormous potential for BrokersLink, but it is a huge continent with specific and different cultures, legal systems, business and insurance practices that require dedicated leadership. By appointing Youness as our regional director for MEA we will be able to provide clients in this exciting and fast-growing market with access to the highest standards of global service combined with local expertise and awareness of local cultures.

Onwards and upwards–Brokerslink

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