U.K. Broker Establishes U.S. Foothold
Editor's note: U.K. firm Giles Insurance Brokers Ltd. opened its first office in the United States in March in Northbrook, Ill. It is headed by the former chief underwriting officer for Allianz, Brian Daly, who discussed his company's strategic direction with Risk & Insurance®
Managing Editor Cyril Tuohy.
Cyril Tuohy: Will you focus on particular lines or particular sectors for the midlevel companies?
Brian Daly: We'll be looking to specialize in a broad sense in property/casualty insurance. We're not planning at this point to be in the benefits business. Specifically, we have strong expertise in property lines, and we'll also be focusing on the D&O and E&O lines. Our definition of midlevel companies will generally be those with sales between $10 million and $500 million. We'll certainly look at clients outside those parameters, but our real efforts will be focused on those midlevel companies.
CT: In terms of the D&O and E&O market, do you see it hardening, or do you see it still remaining pretty much even?
BD: I have to say I don't think it's going to harden. It's a very schizophrenic insurance market at the moment. You've got severe pockets of hardening in catastrophe-exposed areas, with property rates through the roof for risks in those areas. Then there are other noncatastrophe risks and lines, including D&O and E&O, that are not impacted and are still softening or staying level.
CT: Why did you choose to set up shop in the Chicago suburbs?
BD: Chicago is the ideal hub in the U.S., no disrespect to the Northeast. It's much more central being in Chicago. It's arguably the major insurance hub in the U.S. You've got two of the world's four largest insurance brokers, Aon and Gallagher, headquartered in the Chicago area. For insurance carriers, the area is home to four of the top 10 U.S. insurers: Zurich, Allstate, State Farm and CNA.
CT: How many people have you got in your office?
BD: We've got more than 300 people in the U.K., with initial staffing in this office of 10 to 15 in the first year.
CT: Growth targets for the next 12 to 18 months?
BD: It's my expectation that we'll soon begin expanding into some of the major metropolitan markets in the U.S., such as New York, Atlanta, L.A., Dallas and others. We'll be looking to open these additional offices within a couple of years. The goal of the U.S. operation is to be generating $100 million plus in revenues in 10 to 12 years' time.
CT: You stress service and integrity. Do I sense from that that there is not quite enough of it here in the United States?
BD: In terms of the service side, we're bringing together a team of people with experience and abilities who come from buyers, brokers and carriers. With that team you get a true understanding of a client's needs and the ability and experience to craft the right solutions for those needs, both insurance and noninsurance. Many of our backgrounds come from dealing with the largest and most complex insurance programs in the U.S., and we're bringing that expertise, and the service that goes along with it, to our midlevel target clients. In terms of integrity, the insurance industry is a wonderful industry filled with many talented people. There have obviously been some flaws in certain areas that have been exposed in the last 18 months, and we're certainly prepared to assure our clients that we are working at all times with their interests--and only their interests--in mind.
CT: Since you will not be accepting contingent commissions, how will your brokers be compensated?
BD: Although we will not be accepting contingent commissions, we will still be compensated for our services in a reasonable and transparent manner through traditional account commissions and fees. Without the additional overhead burdens that many of our competitors face, I don't see that the absence of contingent commissions will impair our ability to provide exceptional service to our clients while paying our producers fairly.
CT: Who's your primary competition? The majors or smaller firms?
BD: There will be two distinct groups. It will be the regional brokers, but also the middle-market divisions of the major brokers such as Marsh, Aon and Willis.
CT: How long have you been in the United States?
BD: I've been here 13 years, the first 10 years in the very interesting Los Angeles area, and the last three years in Chicago.
CT: How easy have you found it to switch cities?
BD: I can certainly relate to the people a lot better in Chicago than in L.A. The Midwest has a lot of good people with good values. It's a lot easier to feel more comfortable here.
is managing editor of Risk & Insurance®.
June 1, 2006
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