Consilium CEOs on avoiding a "private equity washing machine"

"We haven't got that pain point", co-CEO states

Consilium CEOs on avoiding a "private equity washing machine"

Insurance News

By Jen Frost

Consilium’s new leadership duo is betting on the business’s debt free model to make it a partner of choice, an employer of regard, and a more forward-looking brokerage than some “distracted” peers.

“We have no third-party shareholders, whether private equity or stock exchange investors, so we don't need to make short-term knee-jerk reactions to try and get a bit more revenue to meet the target that the investors set us – we can make more medium- and long-term play decisions,” said James Baird (pictured left), Consilium co-CEO.

“Having just come out of a private equity washing machine, we literally felt that and saw that, [whereas at Consilium] the banks aren’t telling us that we're reaching covenants and we've got to change behaviour, or we’ve got to lay people off, or have got to shut the office down … and we are not distracted by M&A and integrations.”

“It also means that we are profitable when we're reinvesting our profits into growing this business, not paying down debt against the increasing interest rates,” said Consilium co-CEO Paul Richards (pictured right). “We haven’t got that pain point.”

The duo joined the firm from London market (re)insurance broker Ed (part of the Ardonagh stable since 2021 and formerly owned by BGC Partners). Baird came on board at Consilium in November, with Richards having then been appointed in January. The moves were made “independently”, they said, though the leaders have a history of working for the same firms, including JLT (now Marsh JLT) and WTW.

“We’ve been colleagues for 22-and-a-bit years and friends for three months,” Baird said.

Consilium – growth plans and building out divisions

Staff at the London-based international specialty broking arm of Aventum Group may think of it as “Lime Street’s best kept secret”, but the business could be set to breach the $1 billion gross written premium barrier within the next four years, according to the co-CEOs.

“We are predicting that our revenue line will grow 30% year on year [into financial year end 2023],” Baird said.

“We see our GWP increasing proportionately … if that 30% run rate carries on, we'd expect Consilium to be in or around $1 billion of GWP by June 30, 2026.”

On the launch of its cedant FAC reinsurance unit, Consilium consisted of six divisions, inclusive of: UK wholesale, delegated risk, international property, executive risk, and aviation.

While it will look to grow in specialty areas, the broking business will not be “looking to be all things to all people”, according to Richards, and the “next obvious” focus area is cyber.

“We're accumulating clients that will need cyber solutions, particularly in our new professional executive risk team,” Richards said. “So cyber, we're actively looking for the right people.”

The broker will also look to grow its property capabilities in Latin America, the US and Canada, and Southern Australia.

The business is looking to broaden its distribution footprint, with Canada and Australia in the crosshairs. However, it will not be looking to set up offices in the regions.

“We're not going to be putting Consilium offices in those territories – we’re fiercely independent ourselves and we want to stay channel-conflict-free from our retail broker clients,” Richards said.

“We think we can offer them a very differentiated wholesale service in London, accessing the London, Bermuda and global markets.”

Digital will also be high on the distribution agenda, while Consilium hopes its debt free model and a lack of pressure to keep buying up businesses will put it in a good place to focus on service.

“We haven't got the distraction, like others have, of marching to the drum of the shareholders,” Richards said. “So we can really focus on our clients in the long term, medium term, and future.”

“Both Paul and I have worked in Australia as retail brokers and have sent a submission into London to our former organizations not got responses, or [found that] the London market is not open or they're out to lunch when you're on the other side of the world trying to get a deal done for your client or your policyholder,” Baird said.

“It is vital that you have people that reflect your service standards in London.”

Talent and recruitment at Consilium

Headcount at Consilium has swelled from 46 people in June to more than 70 in January, and the broker is set to continue adding talent to its roster; the co-CEOs estimated it would have up to 90 on board by the end of the financial year. It has also confirmed 14 summer internships.

“We have an unwritten rule here when it comes to recruitment … if you were a producer and had a $5 million book, you could probably walk around to most firms in this EC3 and get a job,” Baird said.

“We firmly take people based on: Would you invite them to your house to meet your family on a weekend for a barbecue?

“If you would, we will consider them; if you wouldn't, it doesn't matter.”

Gender split was roughly 50/50 prior to the onboarding of new hires, and the average age at the broker is early 30s. While Consilium is “proud” of the gender balance it has achieved and its young roster, Baird predicted that the “natural skew” of the current market is likely to tip the scales.

“There's more in the over 50s cohort working in London than are in the under 30s, so that creates a problem,” Baird said.

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