David Bearman: ‘Our focus will be to build a broking house that will be decade defining’

As of 4 May 2021, independent global (re)insurance business Direct Insurance Group will be no more, confirms group chief executive David Bearman.

Instead, Bearman is unveiling a company-wide restructure and rebrand that will see Direct Insurance Group morph into the freshly polished Aventum Group, combining the business’s underwriting and broking capabilities under one roof, so to speak.

Within Aventum are two distinct verticals, says Bearman. Firstly, there is Consilium – the company’s rebranded wholesale broking platform. Alongside this is the group’s MGA and underwriting arm, Rokstone, which brings together the company’s global underwriting operations, including Aura Underwriting, iSure, iFarm, Rokstone Construction Risk Underwriters and Novus Underwriting.

Despite the business turning 25 this February, Bearman told Insurance Times that the company is “just getting started”.

He says: “When we pull the sheet off on the 4 May, the idea is to say ‘ok, this is what we’ve built quietly – now we’re coming’. Now we’re ready. Twenty-five years and we’re just getting started.”

Building momentum

The initial planning around the restructure started around 14 months ago, with the ambition being to better pool the group’s expertise to reap business benefits, such as faster decision-making.

Bearman explains: “It was quite obvious that as the business grew and we were getting scale that we needed to pull together the expertise across the business that we had into one area.

“We benefit from the economies of scale by bringing the businesses together.

“We’re not trying to be a nameless, faceless business - it’s about speed, efficiency and having broker solutions that work.

“When we got all these parts together, what you realise you’ve got operationally is a lot of talent and pulling all that talent into one space means that the momentum becomes so much more.

“From an operations perspective, we simplify it and we have one, single operational structure and a flat level of management - decisions get made quicker. Not that we weren’t agile in the first instance, but we become even more agile.

“We’re one business and our capacity teams and the guys that are out there hunting for deals can leverage that.”

In terms of financial milestones, Bearman adds that Rokstone is currently writing nearly $600m in annual premiums, however “we see $1bn as a milestone that we think we’ll easily be achieving within a very short space of time”.

Regarding Consilium, “we’ve got the same ambitions to take that within the next 12 to 24 months to a similar number”, Bearman says. Here, he aims to “build a broking house that will be decade defining”.

Fiercely independent

And Bearman feels there is appetite in the market for what Consilium can offer, considering the broker consolidation that has been rife throughout the pandemic.

“If you look at what’s gone on in terms of disruption, mergers, buyouts, etc in the Lloyd’s market, there’s a lot of dissatisfied people right now. There’s a lot of disruption, there’s a lot of uncertainty,” he explains.

“We’re an independent business. We will remain fiercely independent and I think we offer genuine choice to our global broking network, where they don’t want to have to come into a 60,000 plus employee market that can only be bothered to deal with them if they’ve got a risk that’s paying over $1m. Our focus and efforts will be to build a broking house that will be decade defining.”

As for the “very niche, specialty” Rokstone, Bearman says “the idea is to have a global business and a global distribution platform with local specialty representation”.

He continues: “We trade with 30 to 40 plus markets globally. We are represented now in the Far East, the Middle East, Africa, Europe and North America. We have a local presence in our chosen markets and we have subject matter experts strategically around the world writing various classes of business on behalf of our panel of A-rated markets.”

Next steps for Rokstone include “the digitisation of a lot of products that previously have been difficult to sell or access via a digital platform”. This will see the firm’s global centres of excellence, which each have a specific specialty, beginning to launch these focused products across more territories.

Bearman defines Aventum’s “sweet spot” as “difference”.

“We will only enter a space where we see we can make a difference,” he says. “Where we can add difference [is] on a global scale. The world’s a much smaller space, digitisation of the insurance market is becoming more and more sophisticated and the net result of that is we can deploy quickly with our agility into areas that are either capacity starved, are lacking technology or – quite frankly - lacking an understanding.”

More than financial engineering

Acquisitions aren’t off the table either as Aventum moves forward – Bearman says the group has “a decent chunk of self-earned firepower to complete M&A, whether that be MGA businesses, whether that be broking houses or whether that be teams”, however “what we won’t be is generalists”.

He explains: “We’re not looking to simply hoover up brokers at a multiple because we’re going to try and leverage an EBITDA number. It doesn’t take a rocket scientist to go and hoover up at six- and seven-times EBITDA, to just throw it all in a pot and try and pretend you’re a platform and then try and lob it onto the next private equity house that’s willing for twice the valuation just because you’ve got some operational synergies. That’s just financial engineering.

“We’re genuinely looking to build a business that people will look back in 10, 15, 20 years’ time and go ‘those guys got it right’. That doesn’t preclude us from M&A, but what we won’t be doing is simply casting a net wide, just to add scale for the sake of it.”