Markel’s Whitt: State National plans to implement “three to four” UK programs in 2024

Markel’s managing executive, corporate development, Rob Whitt said he is keen to see State National’s UK entity roll out three to four programs in 2024, laying out the overall goals of the 1.1.24 launch in an exclusive interview with The Insurer TV.

The US’ largest fronting carrier announced in November that it would create a program services division in the UK at 1 January 2024, hoping to tap into the growing MGA market. The Texas-based firm became a wholly-owned subsidiary of Markel in 2017.

Focusing on the size of these programs, Whitt added: “I think that we're going to have some of the same kind of minimum requirements that exist in State National [US] just in terms of the lift of getting things on board, but I think beyond that, we're open to the right programs that are fit for appetite and where we can be a valuable trading partner.”

Whitt was joined in the interview by Markel International’s president Simon Wilson and State National president and CEO Matt Freeman.

According to Wilson, this latest move will mean the business will be able to offer broking partners more options moving forward.

“What I think that State National can bring for Markel International and our operations on the ground, certainly in the London market in the UK, is [to] start to offer our brokers a wider array of products that we might not have been prepared to offer on our own,” he said.

“I think it really starts to open up our offering to something much wider, perhaps larger line sizes or different classes of business,” added Wilson.

Nothing but upside

As The Insurer reported last month, Conning Insurance Research estimated that the global MGA market is worth more than $110bn in premium. While most of that is currently US-based, non-US MGA is valued at more than $17bn, and could be poised to enjoy a faster growth rate than inside the US.

Commenting on the increased competition in the US, State National’s Freeman said: “Everybody that follows the space is aware of the growth and change that's taken

place in the US over the past several years, where there has been a significant increase in the volume of business flowing through this business model, along with a very substantial

increase in the number of players providing services into this landscape.”

He continued: “We continue to be an incredibly significant player in that arena, but the marketplace has grown substantially. I think you've seen a couple additional players entering or participating to a larger degree in the UK market, or others outside the US.

“But we think we're in a position where the volume of offerings in the UK in particular is under-serving the market potential. And we want to be able to provide a vehicle that provides that stable capacity in an incredibly professional way to satisfy the needs of our global trading partners,” said Freeman.

“I can only see upside for us from a trading perspective in the London market and the wider UK regions,” added Wilson.

But there’s no rush, according to Freeman, who explained that the emphasis of the launch would be on the quality of the offering over goals like speed, size and scale, which would emerge later.

“What we're really trying to focus on is providing a valuable alternative and flexible capacity to our trading partners who have become increasingly global and complex over the years,” said Freeman.

“Part of the beauty of being part of the Markel family, so to speak, is that we're in a very patient organisation,” said Markel’s Whitt.

“So we don't feel a tonne of pressure to grow quickly. We want to make sure that we are treating our trading partners in the right way, we're creating a valuable product and service to them,” he added.

Positive reactions

A strong regulatory culture permeates the UK (re)insurance market, but Markel’s longtime presence in the market may have added a sense of confidence to State National’s entry, according to Markel International’s Wilson.

“My sense from the conversations that we have had with the regulator is that the way in which we control the business, for our own binding authority, business our own cover holders, the way that we've got, you know, the structures to ensure that that is done properly, is seen as a very positive thing when it comes to the program management services that we'll be offering via State National.”

Adding to State National’s ease of ingress, according to Wilson, is the global, sophisticated nature of the brokers involved.

“Sometimes, you go to a new market, you have to educate someone on a new product and how it works and all the rest of it. I think a lot of these brokers are very, very au fait with what State National has to offer,” said Wilson.

“So I don't think it's going to be that difficult, it's not an education piece – it's much more for us to make sure that that sort of gold standard offering that State National and Markel bring, let's get that right for the first year, because we can, we have got the time to get it right.”

Watch this 13-minute video to learn more about: