Captive Insurance Times, October 16, 2019, Issue 184
David Lewis,Managing Director of SRS Europe, explains how, in the next few years, the market will see the unbundling of captive insurance services in Europe.
How did the role at SRS come about, and what swayed you to join?
I originally intended to retire from Willis Towers Watson and start some non-executive work but after SRS approached at the beginning of this year, they intrigued me with their different and fresh outlook on the type of services they think a modern captive advisor should be providing to clients. The more I spoke with SRS, the more I realised that it was married to a real ambition to become a new force in Europe and that is very much something I hope to help them progress with.
What trends are you currently seeing in the European captive insurance market?
The big trends that we’re going to see over the next couple of years are what I refer to as the unbundling of captive insurance services. I’ve come from one of the big broker-owned captive managers and companies like that are very keen to offer a one-stop-shop to clients—going from broking all the way through to reinsurance to captive consulting and captive management all in one place.
I don’t think this approach always delivers the best value for the client or offers the level of flexibility that many clients are now looking for. My experience with most European clients, certainly over the last 12 months, is that there is a demand for innovation.
However, in the upper end of the SME market, we’re seeing far more complexity as well as sophistication and seeing more demand for risk financing. In many instances, the networks that service that market are either unable to provide the required level of expertise or, including the major national brokers, are not really focused on providing it because it doesn’t give them the margin or the big-ticket income that they’re all looking for.
As a result, the upper end of the SME market particularly in those areas, there is an opportunity for SRS to meet a growing demand.
How do these trends tie in with the work SRS is currently doing?
One of the things that appealed to me about SRS in Europe, is that we have a largely blank canvas to create a network that is purpose-built for the demands of today’s client. Over the past 18 months or so, we have made significant strides, opening business operations in both Dublin and Malta, but we see enormous potential to grow that network much further. Our goals over the next year or so are to build on the momentum achieved so far, clearly define our business model in a way that better meets client demands and requirements, and expand our resources by bringing in more of the best in the captive industry.
In my view, the European market has actually been a little stagnant in the services that it has provided to captive owners in the past and I think SRS has an opportunity to position itself in a completely different way and provide a genuinely viable alternative.
I don’t think there is an existing model that we want to follow, other than following the SRS ethos of exceptional client service, but we want to be more agile and flexible as well as prepared to unbundle our services to clients without any other internal vested interests—that will be the differentiator for us.