A big deal | Insurance Business America
When Richard Clapham joined DUAL as group CEO in September 2016, he took the reins of one of the world’s largest international MGAs. With more than 30 years of experience on both the brokerage and underwriting sides of the industry, he was well qualified for the job. Clapham’s résumé includes a 12-year stint at XL Catlin, where he was a member of the group underwriting board, a director of Catlin Underwriting Agency and a member of the UK executive committee. He also spent five years at Markel International, where he led the professional indemnity division.
Five years into Clapham’s leadership of DUAL, the MGA has only grown bigger and better. Throughout Clapham’s tenure, the company has been focused on building an organizational structure that is scalable, sustainable and leverages DUAL’s global collective wisdom. It has also successfully diversified its product range and engaged in strategic acquisitions – the latest of which is particularly meaningful.
In August, DUAL announced it was acquiring Align Financial Holdings – a move that will expand its global gross written premium to more than $2 billion. A US-based insurance holding company that owns and invests in best-in-class specialist general agencies and underwriting management businesses, Align is one of the largest independent general agency platforms in the US, writing more than $630 million in annualized GWP through its commercial casualty, commercial property catastrophe, personal property and surety businesses.
The deal will expand DUAL’s US market share from around $450 million to over $1 billion, making the US market home to roughly half of DUAL’s aggregate business written internationally. The acquisition will also further diversify DUAL’s product and program mix, enhance its distribution and cross-sell opportunities, and expand its partnerships with brokers and capacity providers.
Clapham describes the acquisition of Align as “classic” in terms of how Howden Group, DUAL’s parent company, likes to operate.
“It’s all about finding the right partners … where both parties really want to be together,” he says. “And I think [Align CEO] Kieran Sweeney and I are both very happy to see the two organizations come together. That was really driven out of the fact that we have a very strong strategic and cultural fit between DUAL, Howden Group and Align. Another critical piece for us is finding like-minded specialist underwriting-driven businesses, and clearly, in DUAL and Align, we have that.”
Since DUAL was founded in 1998, the business has expanded from a small financial lines operation in Spain to having the broadest geographic and specialist product distribution platform of any MGA, with operations across the US, Europe and Asia-Pacific.
“This deal with Align is truly transformational for us because it sets us on the journey of creating a global platform that is unique in the market, and no others have it,” Clapham says. “The US is the largest MGU market in the world, with approximately $60 billion in GWP, and we felt that DUAL was not the size we would like to be in that market. By combining with Align, we’ve created an MGA that has over $1.1 billion of GWP in the US, which brings us certainty of scale and size.
“Critically, we’ve also brought together two very talented underwriting teams in the US, as well as some very supportive broker partners and a very strong group of carrier partners. And I think they’re all going to see the real value of the talent and distribution we’ve brought together through this deal, because I think they’re going to have even greater opportunities. The product diversification we now have in the US is significant, so I think our offering to our broker partners, together with the technology that both teams have, is really exciting.”
DUAL operates in 16 countries worldwide and works with more than 7,000 brokers to distribute its products. With the promise of a much stronger foothold in the US market, the MGA is focused on “optimizing the collective knowledge and talent” of its extensive inter-national network to improve its products and services across the entire business.
“This really takes us to another level and puts us in an unrivaled position in the global MGA market,” Clapham says.
In the past few years, there has been considerable consolidation in the retail and wholesale insurance brokerage market. For DUAL, one of the benefits of building such scale is the opportunity to unlock access to talent.
“I think the scale of an operation is very much key in encouraging stronger and more talent to join the organization,” Clapham says. “Ultimately, both DUAL and Align are people businesses at their core. At Howden, we talk about people first, and for us, it’s really the talent that drives the business.
“If you look at the flexibility and adapt-ability that we have across DUAL’s global distribution and global platforms, that enables our underwriters to come to work and do what they really enjoy, which is to get on and underwrite. I think we’re becoming more and more attractive to underwriting talent as we grow in scale in terms of the organization itself, our geographic footprint and the products we provide. And then we become an even more attractive proposition to carriers, which is obviously key to us, as that enables us to [participate in] more areas of business. It’s almost a virtuous circle, which is harnessing our carriers, our talent, our platform and our distribution.
“Our ambition is to build a standout underwriting business of real scale globally that allows capital to back talent cost-effectively, combining specialist products with great distribution through our broker partners, whilst keeping our culture. This ambition is accelerated sharply by the acquisition of Align, and I very much look forward to working with the team.”