Direct Group boss outlines global plans

Direct Group chief executive Derek Coles plans to expand the firm’s services globally following its takeover by Ryan Specialty Group (RSG) on Friday.

Coles told Insurance Times that Direct Group will aim to leverage RSG’s relationships in the USA, such as those with Ace, Chubb and other big US carriers, as well as the Lloyd’s market.

“Those companies that Ryan already works with and that outsource quite substantively in the UK are an obvious option or synergy for us,” he said.

“Ryan’s US business is a group of entities looking at everything from construction risks through to life science programmes through to healthcare, so there are a whole heap of synergies at group level.

“So, it is about how does Ryan export to other territories and can we use some of that expertise here in the UK within Direct Group. Then, the other side is how can Direct Group export its platform or third-party administration (TPA) capability to other parts of Ryan.”

Coles, who will remain as chief executive and take a seat on the RSG European board, said although the sale came out of the blue, it was good to have a trade backer behind the business.

“It means swapping a private equity investor for a trade one that understands our business and market and is willing to continue to support our build and buy strategy,” he said.

“Ryan’s credentials are a very good fit for us. Pat Ryan is a legend in the market, having founded Aon and build it up, so working alongside that kind of expertise is something that we are looking forward to.”

Direct Group, which was bought by RSG for an undisclosed sum, will retain its brand under the deal.

Coles said it would be business as usual with Direct Group continuing to focus on distribution and claims, but would also switch its attention to niche services for students, tenants, landlords and young drivers.

He said that although Direct Group’s growth targets remained unchanged, those may be now precipitated as a result of the RSG takeover.

“Last year, we had a turnover of £16m in gross revenue, with EBITDA of £5m. This year, we will be more like £6m on £20m and our target is to be £10m on £30m,” he said.

Coles said that Direct Group would also be looking to strengthen ties with existing partner and Lloyd’s insurer Jubilee, which is owned by RSG.

He added that the company would be stepping up its recruitment drive, having recently taken swooped for former Merlin director of operations Russell Crewe as claims business unit director after Merlin went into administration, and Comparethemarket.com’s director of insurance partnerships David Jackson.    

Coles said that Direct Group, which has 470 staff and manages 500,000 claims per year, would relocate from its existing base in Doncaster next year.

“For me, we are under a Ryan brand now,” he said. “But Direct Group will retain its own identity, statutory accounts and reporting.”