EXPERT VIEW: In 2020, Berkshire Hathaway Specialty Insurance (BHSI) used its business blueprint to build a Manchester-based UK national team. Here its four leaders discuss the state of UK national business and how it has become both wanted and needed – by leaning in to serve customers through their most challenging times.
Why did BHSI start its UK national business?
Head of UK national business Mark Walker: BHSI has a well-established blueprint of how to develop its business. In 2019, we started to develop our European business by opening offices in Ireland, France and Spain.
In the UK, we wanted to build out the success that we had in London to ensure that we were reaching all parts of the UK. We wanted to get closer to our customers and brokers.
More specifically, we wanted to bring our technical underwriting and claims capabilities, financial strength and great service to the customers and brokers outside of London.
The UK market outside of London is big, with many segments being profitable. We felt that our service as well as the quality of our team could be real dfferentiators for us.
We also had no legacy, which enabled us to be very thoughtful about how we wanted to build out.
What was the state of executive & professional lines when you began with the national team and how has it evolved?
UK national executive & professional lines manager James Burke: Our UK national business was brand new, and suddenly in lockdown. So not only were we building the plane and flying it at the same time, but we were also creating our infrastructure.
Wordings, proposal forms, operational processes, broker development, telling the BHSI story and hiring our team were critical activities to get right as we built the foundations for long-term success.
All of this was againstthe headwinds of the biggest shift in E&P insurance market conditions in 20 years.
”As we do not have reinsurance, we had the ability to make our own decisions without being beholden to third parties.”
While other insurers were pulling out of the market, we had an opportunity to lean in and prove ourselves to brokers and customers and be there when they needed us. We were focused in our distribution and partnered with a small number of brokers, allowing us to demonstrate our market-leading service.
One thing that really stood out was our appetite. As we do not have reinsurance, we had the ability to make our own decisions without being beholden to third parties. This allowed us to lean in and help our brokers and customers while others were pulling back and in some cases totally withdrawing from the market.
Now, with capacity coming back into the market, we continue to demonstrate the strengths of BHSI with every interaction. Customers remember how we were there for them through challenging times and appreciate it.
What was the state of the property market when you began with the national team and how has it evolved?
UK national property manager Irfan Esa: We were able to come in at a time when our capacity was in high demand for medium- to high-hazard property accounts.
While more capacity has since come into the market, it remains a challenging time for customers – with inflation raising the cost of material, ongoing labour shortages and supply chain delays.
Our expertise and our market commitment have been really noticed and appreciated.#
“Our customers and brokers are talking to the decision-makers – whether during underwriting or when they have a claim.”
Once we make the decision to get on to a customer’s program, our ideal tenure is forever. We are looking to build long-term relationships, and that’s uniquely valuable to customers.
The fact that we do not purchase reinsurance means we can be consistent in the long term. It also means that our customers and brokers are talking to the decision-makers – whether during underwriting or when they have a claim. That’s a big difference.
What about the UK national casualty market?
UK national casualty manager Gemma McKenzie: We entered the national market at a very competitive time and one that didn’t necessarily need more capacity unless a risk was distressed or of a very complex nature.
Since we weren’t ‘needed’, our mission, and our challenge, was to make BHSI ‘wanted’ in the market. There is a big difference between being wanted and being needed – and it is ingrained in our culture to ensure that we are wanted by our customers.
The first risk we wrote was complex in nature in terms of the product’s exposure. We worked diligently to understand the risk and demonstrated our technical expertise, which was indicative of our approach to underwriting.
As with anything, when you demonstrate strong capabilities, backed up by an excellent service proposition, you become not only wanted, but needed in even the most competitive of markets.
”There is a big difference between being wanted and being needed – and it is ingrained in our culture to ensure that we are wanted by our customers.”
Our local technical underwriting expertise, service proposition, financial strength and our CLAIMS IS OUR PRODUCT philosophy is what has enabled us to build our casualty portfolio.
While harder market conditions can be helpful when building a business, laying the right foundations is what’s important to long-term success.
We currently write primary casualty and excess casualty business for both complex and more standard risks and have capability to write non-conventional placements as well as more traditional ground-up programs.
We also have multinational capabilities and work with our teammates to deliver multinational programs in over 172 countries.”
WHAT’S NEXT FOR THE UK NATIONAL TEAM?
Mark Walker: “We will continue to grow as we have been – leveraging what really makes us unique.
One of our greatest accomplishments has been the quality of the team we have built and the technical expertise centred here in Manchester.
We continue to build out our product portfolios and, increasingly, are dropping down to become a strategic partner to our customers.
We are also looking at moving into the SME space. As always with BHSI, this will be a very thoughtful process, with a long-term focus, to bring to market products that are truly meaningful to this sector.
”We are also looking at moving into the SME space”
Finally, we are looking to expand our broker relationships – as we say at BHSI, ‘going wider and going deeper’ in our relationships.
Reinsurance will continue to change the dynamics of appetites in many areas of our business. Our ability to stay the course, and to expand our course with industry-leading talent and stability, is a big advantage.
We want to be sure the market understands that and knows what BHSI stands for and everything we can do for them.
Berkshire Hathaway Specialty Insurance (www.bhspecialty.com) provides commercial property, casualty, healthcare professional liability, executive and professional lines, transactional liability, surety, marine, travel, programs, accident and health, medical stop loss, homeowners, and multinational insurance. The actual and final terms of coverage for all product lines may vary. It underwrites on the paper of Berkshire Hathaway’s National Indemnity group of insurance companies, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s.
