RFIB owner rebrands, sees insurtech & ILS opportunity, adds Guernsey PCC

The owner of private equity backed international insurance and reinsurance broker RFIB Group Ltd. is rebranding to Risk Transfer Group (RTG), as part of a strategy to double revenues in three years, to include setting up a Guernsey protected cell company (PCC) and recognising that combining InsurTech and the capital markets is a significant opportunity.

Artemis spoke with Steven Beard, CEO of Risk Transfer Group and RFIB as of a recent change in leadership at the firm, today. He explained that the strategic rebrand signifies a way to bring together the various entities of the group under a branding that explains what they are trying to achieve.

CCP TopCo, which is the holding company of RFIB that was set up by the private equity partner of Calera Capital when the firm acquired RFIB in 2015, has announced it is to be renamed to the Risk Transfer Group (RTG).

The RFIB brand will continue to exist, having a heritage that is recognised in re/insurance and in particular the London market.

The firm currently has revenues of £50 million, but anticipates doubling that to £100 million by 2021, by leveraging the RFIB reputation as a leading independent wholesale broker, as well as its Limehouse Agencies holding company that will both acquire and set up MGA’s and Captives.

The firm is already planning to announce a new acquisition in the next quarter of this year and also said that it will establish a UK captive management business later in 2018, as another lever to support its growth plans.

Chief Executive Officer, Steven Beard, commented in the announcement if the rebrand, “We are delighted to announce the launch of the Risk Transfer Group and our plans to double revenues to £100 million by 2021. RFIB is currently outgrowing the market organically and RTG will allow us to complement our healthy growth in the broking sector through the addition of MGAs and a captive business.

“In the MGA space, we see opportunities to serve both insureds and carriers though a combination of acquiring MGA businesses, and investing in talented entrepreneurial teams. Furthermore, we also see opportunities to use new technology to allow clients, particularly in the captive market, to self-insure with better terms. Our combination of independent broker, MGA and captive insurance solutions provides a range of distinct services to allow us to achieve the desired growth in the coming years.”

Speaking with Steven Beard this morning, Artemis learned that the company is already making headway on some of the initiatives that it believes will help to drive further growth for the firm.

In particular Beard told us that Risk Transfer Group will establish a UK mutual for a specific client opportunity.

This, along with the captive business, is a recognition that there are alternative ways to help clients access risk transfer capacity and the traditional broking model isn’t always providing clients with the best possible solutions.

“We’ve got a mutual in the UK that we’re setting up and a PCC structure in Guernsey, which remains subject to regulatory approval,” Beard explained.

On the mutual strategy, Beard said, “We see it as an innovative approach to serving a client need that we believe isn’t best services by a traditional insurance product. We’re very interested in this business strategically, where we understand distribution and pricing. Our job as an intermediary within that broad risk transfer is to match risk with products that meet client needs.”

The company is in the process of waiting for regulatory approval for the establishment of a Guernsey domiciled protected cell company (PCC).

Of course, the Guernsey PCC structure is utilised in the collateralised reinsurance market, as well as for captives and self-insurance.

Beard said that it could be used to offer clients access to collateralised capacity in future, but in the main it is part of an overall ambition to offer clients efficient, innovative access to risk transfer capacity, in whatever form that takes.

“With the PCC, it’s about having it available to solve client needs, whatever those needs may be,” Beard explained.

“The initial application is customer sensitive, but we think it’s another thing in the kit bag for solving client solutions where it makes sense.”

Beard went on to explain that Risk Transfer Group will be, “Focused on identifying areas that we think aren’t well served, either by the way a product is priced or operated, or by the way a client sees the reinsurance market.”

Risk Transfer Group will also be looking to invest in or acquire businesses where they can provide the group with access to expertise or markets where it would have taken the company more time to do so on its own.

Part of this is also an interest in InsurTech, which Beard said is recognised as an opportunity alongside the Limehouse MGA platform as a way to make distribution more efficient.

Here, alternative capital can also come into play, as Beard sees the opportunity for technology and efficient capital markets to combine to offer more cost-effective risk transfer solutions.

Beard said on alternative capital and ILS, “It’s definitely an interesting area, in terms of the evolution of it, especially the role capital markets can play in providing lower, more efficient cost of capital to clients.”

“What we continue to do, is look for the right role for it within our business in terms of supporting new innovations and approaches. We’ve got a watching brief on it.”

Specifically on the wave of interest in technology developments, Beard said that Risk Transfer Group is not looking to invest millions in start-ups, but where a good fit could be found InsurTech opportunities would be seen as attractive and fitting the firm’s strategy.

“As far as InsurTech innovations go, putting ILS capital behind them could be as good and cost-effective as you can get. This will be one element of our overall growth strategy as we go forwards,” Beard explained.

By leveraging the different prongs of the Risk Transfer Group strategy, through the broking specialism of RFIB, the developing MGA platform Limehouse Agencies, the new focus on captives and mutuals, as well as the PCC offering collateralised capacity options, alongside efficient distribution channels created with technology, there is a compelling story coming together here.

The key will be in the execution of this strategy, as having all the elements of a platform for growth won’t necessarily deliver the revenue increases desired. But the solid base of RFIB and the forward-thinking leadership of the Risk Transfer Group, which includes Dennis Mahoney who was previously CEO, means the capital markets and efficient risk transfer are bound to feature.

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