Leaders look back on 20 years of serving the ancillary insurance services market

Building a one-stop solution amid changing market conditions

Leaders look back on 20 years of serving the ancillary insurance services market

Insurance News

By Mia Wallace

The leadership team of Arc Legal recently received a timely reminder of how long the group has served the insurance market - it employed its first member of staff born after the company was founded in 2003.

That was a real milestone moment, noted director of strategic development Richard Finan – and one which prompted reflection on where it all began. Finan, who founded the business alongside CEO Frank O’Malley and Helen Withers – who retired in 2020 – highlighted how the team came together with the mentality that starting from a “blank sheet of paper” was not a challenge, but rather an exciting opportunity to do things differently.

Arc Legal – how it all began

All three founders had substantial experience working in legal expenses insurance (LEI) businesses, O’Malley (pictured) said, so they recognised where greater efficiencies could be achieved and set about building the company on that foundation. They left their respective firms in 2002 and launched in 2003. By the end of their first year of trading, they had secured two major contracts; one with Liverpool Victoria (now LV=) and the other with the Metropolitan Police Federation, the largest federation in the UK – two partnerships they still hold today.

“Our previous businesses were set up in the 70s and the business model that had evolved was based around the relationship that legal expenses insurers had with solicitors,” Finan said. “So, at that time, there was a natural conflict of interest because you have an insurer that’s looking to provide a service to a customer and minimise claim spent. And then on the flip side, you have solicitors looking to provide a service to a customer, but also maximise their income.

“The business model had been built around managing that conflict of interest. Then in the late 80s, early 90s, law firms developed to become more commercial. They could see the benefit of working with large-scale providers of work… [and how] that offers a more streamlined service which is better for the customer because they were able to speak to the law firm day one.”

Another critical milestone in Arc Legal’s two-decade journey to date was its acquisition by AmTrust International in 2016. That represented a “real vote of confidence”, O’Malley said, because AmTrust International recognised the value that Arc Legal and its team would provide – and established it as a centre of excellence in the ancillary insurance services market.

“We had taken the business to a certain level and we felt that for the next stage of development, we needed a corporate support and structure,” Finan said. “AmTrust gave us that platform to grow the business from there. Our third milestone has been our acquisitions and integrations. When we became part of the AmTrust family we were invited to look at businesses that would potentially be good partners.

We’ve identified a few that we’ve integrated recently that have given us greater capability and a broader range, which is really important for us as we grow. Because we’re not just a legal expenses insurance company, we’re an ancillary insurance provider, so we offer a full range of assistance products and services. This is especially relevant right now with increased focus on customer value and with more regulation around how products are sold and permission levels, etc.”

What’s changed for Arc Legal?

The change in the regulatory landscape has been the most significant change Finan and O’Malley have seen sweep the market in the 20 years Arc Legal been in operation. And amid current market conditions, he said, it is in Arc Legal’s partners’ interest to consolidate where they’re purchasing ancillary insurance products and services from – so the team is actively working towards building a one-stop-shop solution for the sector.

Looking at what hasn’t changed since the foundations for Arc Legal were first laid down as a business plan, Finan emphasised the value placed on relationships is as strong as ever. Arc’s relationships with its partners and also with its suppliers are at the very heart of its business model and that’s not something he believes will ever change. COVID was a very tough time for the market because while remote communication channels proved their worth, he said, they were not a replacement for being able to get out and form lasting relationships - and it’s great to see how the market has bounced back.

“What also hasn’t changed within the business is that family, small business atmosphere that we had at the start,” O’Malley said. “Even though we’ve grown so much, we’re trying to keep that spirit alive where anyone in the business can access any of the leaders of the business at any time. It’s really important to us that this culture is maintained because it was so critical to our success in those early days.”

From his perspective, Finan said, what remains a huge advantage of the insurance sector is that talented individuals can progress in their careers, no matter what level they entered the industry. If you work hard, you can succeed and there’s no restriction on how far you can go and what you can achieve – which he’s glad to see is still the case across the market.

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