Canadian insurance brokers access the London Market

Canadian insurance brokers access the London Market | Insurance Business

Canadian insurance brokers access the London Market

Since moving to Toronto in January 2012, Gary Hirst has been building connections between Canada and the London Market, where he previously called home.  

He is probably best known for his role as president and CEO of CHES Special Risk, a Canadian MGA and Lloyd’s coverholder, with in-house binding authority of over 250 products. In addition to that, Hirst serves as president of the Canadian Association of Managing General Agents (CAMGA), a non-profit organization that advocates for the MGA industry both in Canada and worldwide.

Hirst hasn’t stopped there. In 2019, CHES Special Risk was granted permission to conduct wholesale broking services through Lloyd’s approved trading name, HIRST & Partners. Established as a fully accredited, Canada-based Lloyd’s broker, HIRST & Partners can conduct services from any worldwide jurisdiction, directly with Lloyd’s underwriters, from its regional offices across Canada.

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“We started HIRST & Partners for several reasons,” said Hirst, “the primary one being that we’ve seen a lot of business not being placed into the London Market because the costs of owning a London Market intermediary or running a business in the London Market are extremely high.

“On top of that, the exchange rates involved in exchanging Canadian dollar into UK pound sterling [are unfavourable]. The minimum premiums needed and the minimum operating costs of running an intermediary in London simply make it very difficult to place business with Lloyd’s syndicates who might actually be interested in writing that business.”

As a Canada-based Lloyd’s broker, HIRST & Partners can transact business on the Canadian dollar exchange rate, meaning that its minimum cost requirements are far lower than a London-based intermediary, thus opening up more opportunities for Canadian brokers to access the London Market.

“We now offer two ways for our partners to access the London Market,” explained Hirst. “One is via CHES Special Risk and the capacity we’re provided directly by the London syndicates, and the other is through HIRST & Partners, where we can offer brokers access straight into the syndicates at Lloyd’s.”

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HIRST & Partners has got off to a strong start. According to the CEO, Lloyd’s syndicates are attracted to the independent intermediary for the same reason as the local Canadian brokers – the costs of doing business are lower, and the speed of delivering products to market is faster because the firm is based in Canada.

“A second factor in our success is the fact that I’ve got relationships with various Lloyd’s syndicates that go back many years, and those syndicates are interested in doing business with us directly,” Hirst told Insurance Business. “Relationships are key in the London Market. We’ve been able to put together some successful products directly with people that we’ve known for many, many years.”

While there’s no competition between HIRST & Partners and CHES Special Risk at present, Hirst said he “could see some arising” in the future, and that would be a good thing. He pointed out: “To a large extent, competition is healthy. It drives innovation.”