The power of independence

Ahead of RKH Reinsurance Broker’s imminent rebrand to Howden Reinsurance Brokers later this week,The ReInsurer caught up with Elliot Richardson, chairman of the intermediary to discuss the forthcoming 1.1 renewals, the Lloyd’s opportunity and the ability to be a challenger.

As the industry focuses on 1.1, Richardson highlighted that the forthcoming renewals are shaping up to be some of the most complex he has ever experienced, with Covid-19 uncertainty, challenges with at-home working and the myriad of market capital raises all serving as “distractions” that will place a “huge burden” on renewal dates.

Of particular concern is the question of a “delta” between rates in the direct and reinsurance markets, he said, adding that the industry is too reliant on anecdotal evidence concerning market movements.

“There’s going to be the issue to balance up the direct market versus the reinsurance market and seeing if there’s a continual delta between what’s happening in both,” Richardson explained.

“We’ve worked in this industry long enough where people are talking about rates are up by X, rates are down by Y; that needs to change.  We’re still far too anecdotal as a business and as an industry.

He added: “We should be brave enough as an industry to talk about what we do think it is, not just brokers trying to protect their client’s position or people trying to talk up the market more.”

Richardson said Hyperion Group – through its data and analytics arm Hyperion X – has an ambition to tackle this issue through the launch of a real-time rate guide for the industry that will be updated on a weekly rather than a look back basis.

“It’s good for the industry to be talking about real-time rates, it doesn’t just have to be a Hyperion initiative. We hope it will gain momentum and add more data points,” he said. 

Lloyd’s play 

With Hyperion-owned RKH set to be renamed Howden Reinsurance Brokers from 1 October, Richardson was bullish on the group’s future outlook, pointing to its “big bet on Lloyd’s” and the market’s ongoing turnaround as offering an opportunity for growth.

“We are a big backer of Lloyd’s, probably bigger than any other broker proportionately,” he said

“Before the recent merger between Marsh and JLT we were the largest insurance provider of premium into Lloyd’s, which is something that most people didn’t realise, $3.5bn of premium into the market is we believe our support in the long-term future of Lloyd’s.”

The addition of MGA Dual, one of the largest international MGA platforms, combined with the data and analytics offering provided through Hyperion X means that the intermediary is well positioned to move quickly into growth areas and is ready to raise and deploy capital.   

“We’re able to spot trends rather than fads in terms of market movement profitability, blocks of business that we could probably trade better with our markets,” he said.

Richardson added: “We will keep building in London as it is going to be very much our centre of what we continue to invest in in the reinsurance world.”

For the next generation

With broker consolidation firmly back on the agenda in 2020 following Aon’s landmark deal for Willis Towers Watson, Richardson said the group remains focused on attracting best in class talent and bringing in people who want to be aligned with Hyperion’s core value of  independence.

“Independence is, at scale, the ability to be a challenger, we’re going to do things properly. Clearly reinsurance is going to be a huge opportunity with the inevitable need for choice when you’re throwing the top four together and making them two.”

He added: “Hyperion I describe a little bit like a famous watch brand’s strapline, we’re looking after this for the next generation, we don’t own it. And that right to remain independent is something that we remind ourselves of every day.”