The wholesale insurance business exists to solve complex problems for complex clients – and amid an increasingly heightened risk environment that requires more considered and creative solutions.
That’s the prognosis from Andrew McMellin (pictured), who heads up Markel International’s Wholesale division and is a keen advocate for the variety at the heart of wholesale clients and the need to take a more joined-up approach to supporting them.
Turning his attention to the complex solutions at the heart of the wholesale market, McMellin highlighted that London works especially well as an ecosystem because it brings together tonnes of expertise in a very small area. It all works together when you have underwriters working with brokers to create solutions, he said, and where people are happy to work together to develop an idea with promise.
“Taking a portfolio approach means thinking about how we can develop the business profitably by thinking about who we serve and how we can work with brokers more holistically,” he said. “We recognise that within any portfolio there will be business that is more and less preferred. But if we go into it with a portfolio mentality, we can look to take some less attractive business from brokers while recognising that there’s other business within their portfolio that’s more preferable to us. If we look at it collectively, that’s a more powerful measure than looking at it individually.”
He looked to some of the fast-follow facility business the insurer has been developing with its brokers which it might not have pursued so avidly in the past. Where once the business might have found reasons to say ‘no’ based on not liking maybe 10% of the risk, now if the overall portfolio looks strong, it’s willing to proceed with conversations. “Then we’re providing a real solution to the broker, and they do remember that, and it makes it more attractive for them to do business with us.”
It’s with that in mind that Markel International has invested to quadruple the size of its portfolio development solutions team in the last three years. However, reflecting on the factors behind this strategy, McMellin highlighted that it is not just down to the investments made but also the engagement of the team. Having served various firms across the specialty insurance market for some three decades now, McMellin noted that it’s not always the case that underwriters are willing to engage with portfolio managers on pricing and claims.
“Today, when we have quarterly business reviews, we make sure that we have underwriters, claims and actuaries in the room – and they’re all talking about the ways in which we can more closely collaborate with clients and brokers, opportunities to grow the business profitably and how we can hit our margins,” he said.
“We’ve shifted the way we engage with brokers. One of the key themes of the past three years is that we’ve become a lot more distribution-focused. We’ve recognised that distribution adds value to the equation and brings us business, so how can we engage with them better? And we’ve definitely heard from brokers that we will execute what we promise to do, which has been very encouraging.”
It’s no mean feat getting the blend right between serving your stakeholders and making profit, and recognising the power of taking a portfolio-approach rather than an individual risk approach. McMellin highlighted that it requires a true mindset shift because it’s an approach that needs to be embedded throughout the entire business. “We’re thinking about what we need to be able to do to succeed as a leading specialty carrier in our chosen fields and markets. Clear distribution is part of it and working collaboratively is another.”
“I think we’re set up well going into 2025,” he said. “It’s not just about having these relationships but also about being able to think a little more holistically about the business, to talk to the underwriting team to get them thinking about their portfolios and not just about the individual risks.
“This approach is about encouraging them to work out within their portfolios – ‘where are the areas where you can create an advantage over your peers because you know more about that risk, what data do you have, how do you think about the different elements within that portfolio and how they operate?’ And that’s particularly key going into yet another year of heightened global risk.”
