“Success in the Lloyd’s market is ultimately driven by the people behind the plan”

23rd May 2024

Keith Nevett talks about his new role at Davies, why the business remains ahead of its peers, and in a career spanning three decades which brought over 30 new syndicates into Lloyd’s, he talks about how Lloyd’s has changed over that time.

You have taken on a new role, what does it mean for yourself and the business?

The role is a fantastic opportunity both for personal growth and for advancing Davies’ business strategy. What we have created is a bigger team, which has a far wider remit. The role is now not just with Asta but brings in the MGA, broker, and captives operations. In effect we have taken the best of both organisations and brought them together as combined we can provide a broader range of services for clients. What has not changed are our principles. We are still focused on acting as a strategic partner not just at start up, but also offering solutions and services that enable those businesses to grow and be successful.

These changes come at an exciting time for the market. Our clients are benefitting from the strength and reach of Davies underpinned by expertise and experience of the wider team in Insurance Solutions, and the unrivalled track record of both Asta and Davies in bringing new businesses to market.

My responsibilities include liaising with potential clients to assess compatibility with IS and managing their onboarding process, ensuring compliance with regulatory requirements and timely delivery of services. Additionally, we’re aligning with IS’s strategic initiatives, including expanding our geographical presence and collaborating with the Group Growth team to explore cross-selling opportunities.

It’s a dynamic role, full of challenges and possibilities, and I’m excited about what we can all achieve together.

How has the Lloyd’s market changed throughout your career?

Reflecting on my 30 years in the Lloyd’s market, the evolution has been remarkable. I joined the market in 1994 just before Lloyd’s started its Reconstruction and Renewal programme which included the establishment of Equitas to deal with catastrophic losses from historic asbestos liabilities, turning a period of crisis into one of transformation and resilience from the late 90s onwards.

Since then, Lloyd’s has consistently grown stronger. If you look at what was required to set up a syndicate then to the process we undergo now, it is a lot more robust. It was easier in the past. I think when I started in the market you would never have imagined the ability to create a syndicate in a box, which is a fantastic idea.

Lloyd’s has embraced technological innovations like Blueprint Two, which promises to streamline operations and enhance service throughout the market. Alongside this, there’s been a significant cultural shift, particularly in promoting diversity, equity, and inclusion, which has enriched the market and its approach to business. Attracting diverse talent to the market isn’t just a moral imperative; it’s business critical. Diversity of thought and experience leads to better decision-making and innovation.

Throughout these changes, Lloyd’s has managed to retain its core identity. It still stands as a beacon of trust, expertise, and financial strength in the global insurance market. It remains a great place to work – whether you are an underwriter, broker or providing professional services to the market, there is a wide variety of opportunities available to anyone looking to build a career in insurance.

As I look towards the future, I’m excited about the opportunities that lie ahead for Lloyd’s. As part of the broader Lloyd’s community, it’s a privilege to contribute to and benefit from the market’s continued success and leadership in specialty insurance.

How is the combined MGA platform coming along?

It is an ongoing project that promises to combine the best of both worlds, enhancing our market presence and attracting new MGAs. Our key differentiator  will be our ability to offer Asta’s strategic partnership model with Davies’ approach to providing a lighter, Authorised Representative framework. We’re not just UK-focused; our operations in Bermuda, Singapore, Dubai, and now Guernsey, position us for a truly global reach. This geographical diversity, combined with our commitment to quick market access without compromising on service quality, sets us apart. We view ourselves as much more than service providers; we’re strategic partners dedicated to helping our clients grow and diversify. With a strong pipeline of diverse and high-quality MGAs, we’re optimistic about our future development and the wider MGA market.

You mentioned not just being a turnkey for start-ups, why is that important?

We describe ourselves as third-party managers, not turnkey providers, which means we’re deeply involved in our clients’ journeys beyond just the setup phase. Our relationship with Carbon showcases this commitment. They started as an MGA under Davies, worked with Asta to establish an SIAB at Lloyd’s and after three successful years, became a full syndicate. This illustrates how we support our clients from inception through significant growth phases. This level of involvement underscores our belief in a partnership approach, where understanding and supporting our clients’ ambitions and objectives is paramount.

It’s nearly 4 years since the first Syndicate-in-a-Box was launched at Lloyd’s and Asta currently manages six, including the recently launched Oka Syndicate 1922. Has the platform lived up to expectations?

The SIAB model, which we played a pivotal role in shaping, was designed to offer a streamlined path for new entrants into the Lloyd’s market. Its appeal lies in its promise of fast approval, lighter oversight, and lower operational costs compared to traditional full syndicates. This approach not only lowers the barrier to entry but also accelerates the pace at which new and innovative players can bring their offerings to the market. I think we’ve largely achieved that with most SIABS gaining approval within 6 months of their first enquiry to us.

The success of the SIAB platform also reflects our own ability to identify and support ventures that align with Lloyd’s strategic objectives. By fostering a diverse range of innovative businesses, Asta and the SIAB model contribute to the evolution and resilience of the Lloyd’s market, ensuring it remains at the forefront of the global insurance and reinsurance industry. Oka is a great example, as is the MCI syndicate 1966 which received in principle approval in February.

Don’t syndicates still want to fly the nest eventually?

Some syndicates will always aspire to operate independently, and we’ve seen successful transitions in the past, like Dale in 2022, which moved on when it aligned with their strategic goals. However, the journey with third-party management can also be a long-term strategy for many. Take the example of Syndicate 2525, which has flourished under our management since 2011 , growing into a syndicate with over £100 million GWP and consistently performing in the upper quartile. This showcases third-party management not as a temporary fix but as a viable, long-term, and cost-effective solution.

Isn’t third party management more costly than having your own managing agency?

There is sometimes the perception that third-party management is expensive, but that doesn’t hold true when considering the economies of scale we achieve, maintaining high-quality service at a lower cost. Our track record of retaining clients for extended periods speaks volumes about the value and efficiency of our model. Setting up and managing one’s own Managing Agent is a significant undertaking and investment, making third-party management an attractive alternative for many.

Interestingly, even those syndicates that do ‘fly the nest’ often return for specific services, acknowledging the unmatched quality and cost-effectiveness we offer. This demonstrates a recognition of our value proposition, emphasising that the benefits of third-party management extend well beyond initial setup and operational support.

Entry to Lloyd’s is all about People, Plan and Capital. What does that mean?

As with all business plans it’s about presenting a clear, realistic strategy that aligns with market opportunities and challenges. This involves detailing the types of insurance to be underwritten, the geographies targeted, and how these decisions support consistent underwriting returns. A thorough plan also addresses how business will be sourced, includes an ESG strategy, and adheres to Lloyd’s franchise guidelines, ensuring every assumption is well-founded.

Success in the Lloyd’s market is ultimately driven by the people behind the plan. This means assembling a team with a proven track record in the targeted classes and geographies, led by experienced management. It’s crucial to demonstrate that the team possesses the expertise, resources, and integrity to manage the business in line with Lloyd’s Principles for Doing Business.

Lastly, the foundation of any syndicate’s strategy is robust financial backing. Entrants must show they have secure capital sources to support the business for at least the initial three years, demonstrating financial resilience and long-term viability.

You’ve been involved in over 30 start-up businesses at Lloyd’s. What was the most memorable and why?

Nephila, at the time it was the first ILS backed syndicate that took a while to get across the line with Lloyd’s and actually required Nephila to present to the Franchise Board (now the Council), which had not happened before and hasn’t happened since.  For all the underwriting to be undertaken from Bermuda was also unique at the time.

When you’re not helping new syndicates into the world’s leading specialty market, how do you like to spend your downtime?

Spending time with the family including playing golf with my son and watching football with my daughter – along with running and cycling to keep the pounds off!

If you would like to continue the conversation, get in touch with Business Development Director, Keith Nevett at k.nevett@asta-uk.com

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