Kingfisher adopts strong M&A focus as part of business re-brand

Last week, Vantage Holdings group chief executive Jacquie Boast announced that the broking and underwriting business had undergone a 12-month, multimillion pound transformation and change programme.

A key facet of this project was a re-brand into the new Kingfisher Holdings, which has some very ambitious growth plans; Boast tells Insurance Times that the Kingfisher group aims to bump its current £125m gross written premium (GWP) up to £500m within the next four years using a combination of organic growth and acquisitions, building market share within its specialty verticals.

As Kingfisher is owned by US niche insurance specialist NSM, which is backed by White Mountains Insurance Group, Boast adds that business size is not a concern when it comes to acquisitions – “it’s more about the fit within that focus of business,” she says.

Although “very open” to acquisition opportunities, Boast still has objectives for the group’s next purchase.

She continues: “We are constantly in dialogue with organisations that fit our profile of speciality insurance. Today, about 75% of our company is in broking and 25% is represented by our MGA, First Underwriting. So, we are very open to looking at both broking and underwriting growth within that strategy. We are also quite heavily personal lines focused today with regards to our lines of business and as long as it fits what we call the speciality – we don’t want to get into high volume, standard insurance. That’s not the focus of this organisation.

“It needs to be something that has a dynamic that is speciality in terms of its underwriting. Also, with an environment where it has very strong experience and domain knowledge of that particular vertical.

“Speciality insurance by its sheer nature needs individuals that really understand the customers and the needs of that customer for that particular type of insurance, so we haven’t got any particular vertical speciality that we’re saying that we are targeting.

“Today, we’re very much into personal lines. We’ve got quite a lot of wheels-based insurance. We have targets that are both within young drivers and challenged drivers, is the way that we describe them. We do a lot of business within the collector and classic car market. Also, we do quite a lot of travel and leisure insurance, so we’re keen to talk to organisations that have books of business in those areas so that we can add strength and market share into the verticals that we’re already in. But any particular speciality lines that are focused in those areas, we are very keen to talk to.”

In terms of the planned organic growth, this is being headed up by the firm’s new chief commercial officer Andy James, who was appointed at the beginning of the year. Under his leadership, a “very strong sales, marketing and product team that’s all new to the business” has been created, alongside a new omni-channel communications approach and centralised marketing team. Boast hopes this will also support the cross selling of products across Kingfisher’s brands.

Need for change

But why was Vantage Holdings so in need of a spruce up structurally?

“The group structure was quite siloed before – we had a lot of duplication in each one of those lines of business,” Boast explains.

“Also, when you look at the spread of the different products that we have, in each one of those lines of business they didn’t have necessarily all of the commercial skills, the technical skills and the product skills to be able to make those investments in isolation. So, by putting that in the centre, in the core of what Kingfisher is delivering to them, it’s giving those lines of business access to talent, experience and capabilities that they may not have been able to have afforded if you look at them in isolation.

“The other key area of it was that we wanted to make sure that we had a good platform for that growth, so doing M&A activity means that you want to go out to those businesses and to offer additional value. It’s not just about selling a business and walking away. Most of the companies that we buy come with very strong talent and we want to make sure that that talent feels that they’re coming into a business that can help to nurture them but grow.”

Alongside bringing disparate business functions together, Boast adds that Kingfisher has also invested heavily in technology – this includes the creation of an in-house development team, which Boast plans to use in partnership with “best-of-breed” external suppliers.

However, technology investments this year have centred around the customer experience and “building more digital capability in the front end to allow our customers to be able to either buy or service their insurance through different channels rather than just purely being able to call us”. This includes launching a number of apps, which support customers to upload documents, for example, or to access renewal capability.

Moving forward into 2021, Boast adds the business will be bringing “considerable investment into back office consolidation”.

Covid implications

Naturally, conducting a transformation project amid a global pandemic must pose its challenges, however Boast says the coronavirus-induced downturn in some of Kingfisher’s lines of business enabled the organisation to focus more on internal change.

“The downturn in some of our lines of business allowed us to be able to make changes quicker because we had the time and the capacity to be able to engage with our employees and train them as we were going through the pandemic,” she explains.

But, “as you can imagine with such a programme, layering Covid on top of that has had its challenges – not in terms of our strategy or our focus, but just in terms of our ability necessarily to be able to train our staff. Some of those things have been impacted,” Boast continues.

“As much as yes, there have been challenging times when you layer Covid on top of a change programme, I actually think that that dynamic has actually made us stronger as we’ve come out of it because of the sheer nature of the fact that everybody has had to work much more collaboratively during those times.”

Pandemic exposures

More broadly, Boast adds that Kingfisher has been “very strong” operationally in the face of the Covid-19 pandemic.

“We were very fortunate that we’d already invested in some really good tech before March, so when we scattered every one of our employees to the four corners of the UK - have laptop, have headphones, please now go back home. From an operating perspective, we came through that very strongly,” she says.

In terms of exposed lines of business, Boast notes that Kingfisher’s young and new driver proposition stalled when the government suspended driving tests. However, when these were reintroduced in July, there has been a steady uptick throughout August and September for young driver insurance.

Kingfisher also deals in travel and leisure insurance. “With people not being able to get out and about with their caravans and their mobile homes, we saw a slight slowdown in that, but the minute the government allowed people back out again to travel, we’ve seen a significant pickup back to pre-Covid levels on those lines of business as well,” Boast says.

The company’s collector and classic car book, motor trade and commercial book “were very strong throughout Covid”, Boast adds.

“The fact that we have a good, broad spectrum of businesses within the group has allowed us to remain strong in certain areas through that Covid environment. But we’ve seen [a] very strong [uptick from the] middle to end of July and a lot of our lines of business are now back to where they were pre-Covid levels.”

Leadership support

Boast took helm as group chief executive of Kingfisher in January this year – she initially joined the firm as its new group chief operating officer in July 2019. With the Covid-19 pandemic hitting just a few short months after her promotion, Boast has had to rely on her supporting leadership team more than ever. Alongside James, this includes Bruce Gray, chief financial officer at Kingfisher Holdings, and Tom Donachie, who has recently been promoted to managing director of First Underwriting.

“I was delighted to take over as the [chief executive],” Boast says. “Having spent six, seven months getting to understand the business since the previous July and realising what a great opportunity we had with regard to the restructure but also the ability to grow the organisation, to take ownership of the mantle and lead it from the front, I was delighted to do.

“We’d brought in some very strong management before Covid hit, so I have a fantastic leadership team that’s around to support me and I also think that what Covid did in terms of our employees is it [has] brought everybody together as well. We’ve had to communicate a lot stronger because people are more disparate.”