Siaci raising fresh capital to invest in global programmes capability

Siaci Saint Honoré, the biggest independent insurance and reinsurance broker in France and second biggest in the country, plans to secure further investment from private equity fund Charterhouse Capital Partners to help pursue further international growth and support its proposition as a serious alternative to the big listed global brokers for global programmes. Pierre Donnersberg, chairman of Siaci Saint Honoré, told Commercial Risk Europe as the French market gathers in Deauville for the annual AMRAE conference, that the broker already offers French and other multinationals a serious offering in the global programme space. The firm has two teams of specialists based in Paris – one for employee benefits and one for non-life risks – that already coordinate more than 300 global programmes for customers. As the further investment from Charterhouse is arranged to increase the group’s capital by 10%, the broker also launched Siaci Global Partners at the end of January. This is Siaci’s international network spanning 170 countries, which it hopes will enable the firm to foster cross-sales for benefit, life and non-life risks, explained Mr Donnersberg. Siaci also announced two weeks ago that its medical arm MSH International has signed an agreement with Teladoc Health, a world leader in virtual health services that covers 130 countries, to support its existing telemedicine offer. Mr Donnersberg said these developments provides AMRAE members and peers across Europe with a serious option for their global programme needs. “Our clients value our independence and the fact that we are a real alternative to the large Anglo-Saxon brokers,” he said. “We have been placing and managing global programmes for our clients for over 30 years. We have two teams of international insurance specialists in Paris, one for employee benefits and the other for property, casualty and other non-life risks, which coordinate the 300 global programmes that we place for our clients. These teams work closely with our technical departments and our network partners to ensure that the foreign risks of our clients are properly insured in compliance with local insurance regulations and practices,” added Mr Donnersberg. “We are launching Siaci Global Partners, which is our network of owned offices and independent partners in over 170 countries, enabling us to manage all the insurance needs of our clients. We have worked with these partners for many years, in some cases for more than 30 years. At the same time, we do not impose our partners on our clients, but offer flexibility in the choice of local broker in order to adapt to and satisfy our clients’ needs,” he continued. Siaci’s pursuit of fresh investment to further its growth should not come as a big surprise to anyone in the French market. The group made 20 acquisitions between 2015 and 2018. Last year it carried out a management buyout from PE fund Ardian, which remains a minority investor, and investment bank Edmond de Rothschild. The fresh investment from Charterhouse is a continuation of this growth story and further acquisitions are likely soon, explained Mr Donnersberg. “Pursuant to the very active development of our group over the period 2015 to 2018 we took the view, in agreement with Ardian, that a new step had to be taken in order to take the group to the next phase, and fresh investment capacity had to be brought. In this context, several funds showed their interest and we picked Charterhouse Capital Partners for their strong interest in our development and their will to support the management team, both in itself and as a shareholder. Ardian, which has helped us a lot in our growth, stays in the capital as a minority shareholder,” he explained. “Taking into account the acquisitions we have already made, or those yet to be finalised, we intend, with the support of our financial shareholders, to increase the group's capital by around 10%. This is an excellent opportunity to strengthen the group's structure and become more disciplined in economic and financial terms,” he added. Its recent growth spurt has seen Siaci increase turnover by an impressive 85% during the last four years, through a mix of acquisition and organic growth. “This has been achieved through a mix – half each – of both. Organic growth – thanks to our commercial dynamism and the changes in regulation, eg employee benefits in France and abroad, and in the needs of the corporates. External growth has seen us developing in France and abroad, particularly in specialties such as jewellers’ block, partly through the acquisition of privately owned French broker and Lloyd’s coverholder Driesassur last January and, naturally, in marine, largely through the acquisition of Cap Marine in 2016 and Italian broker Cambiaso Risso in 2019, where we became last year one of the top three worldwide players,” explained Mr Donnersberg. This growth and determination to retain an independent, lean and flexible approach is helping Siaci compete with the big listed global brokers, he continued. Adding: “We are the second largest broker in France with a strong international presence through offices in 20 countries. We have a flat hierarchical structure, which means that we can take decisions very quickly in terms of investing in people and systems to respond to our clients’ needs. Owing to our reputation, dynamic development and unique capital structure, we are able to attract the leading insurance specialists in the various markets where we have a presence.” So what can AMRAE members expect from the insurance market during the next 12 months and how can they prepare? Mr Donnersberg said customers need to be ready for a hardening market for at least another 12, and perhaps up to 18, months. “The market has been becoming harder for 15 months, for all the non-life area of business. This has been driven by a poor track record for insurers over the 2017 and 2018 years, management of book volatility and the opportunity for insurers, more than reinsurers, to recover higher margins. This has been leading to this hardening market for both first-party and third-party risks. This trend may well continue for at least the next 12 to 18 months,” he said. Mr Donnersberg provided some useful advice to AMRAE members, many of whom will never have experienced a hard market, on how to cope with these conditions. “The best way to overcome such hard market conditions is to work with your broker within several key parameters. First, increase self-insured retentions through the primary layer, but also to carve out some sensitive exposure. Second, use reinsurance – quota share, excess and stop loss. In other words, optimise market utilisation, in order to relieve stress from the mainstream market for a given line of business by moving some side coverages – critical catastrophe, political violence, CBI, NDBI and the like – to dedicated markets that are more comfortable to write these critical exposures. Third, increase initiatives for risk prevention and mitigation, and business resilience. This can be done by the implementation of an early warning system monitoring tool, business impact analysis and then business continuity plans and the like,” he explained.

Siaci raising fresh capital to invest in global programmes capability

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