Howden Group puts ‘a new clank in that whole model’ by backing Dual with capital

Howden Group chief executive David Howden described the company’s MGA Dual as being “absolutely of the moment” and “in quite a unique position” after the firm opted to deploy its own group underwriting capital in the MGA last October, alongside provisions from its existing capacity providers.

Howden believes this approach creates a “very interesting hybrid model”.

He explained: “Ultimately, Dual is an underwriting business. Duty of care is to try [and achieve] a profit for its capacity providers. We have been on a long, long journey with Dual to make sure that we deliver on that promise and part of that is embracing the right level of investment in data to understand our business well enough.

“We are now at that point with Dual [where] we want to go one step further in the partnership with our existing capacity providers; not only are we your partners because we’re investing in building Dual out, attracting talent and better technology, [but] we’re literally your partners because we’re also going to be putting our business capital, our own group capital behind Dual.”

Dual has been working with some of its capacity providers for more than 20 years, Howden added, but the feedback from partners so far has been positive.

“The reaction I’ve had from a number of our key capacity providers has been very welcoming,” Howden said.

“They understand that in no way are we looking to write 100% of Dual, [we are] not looking to replace our existing partners – quite the opposite. We’re looking to strengthen our partnership with them.”

Howden Group has been “working on this for quite some time”, Howden continued. “It’s a very interesting development”, but “not a sudden one”.

“I think it puts Dual in quite a unique position. It’s got the flexibility and the adaptability and agility, importantly, of an MGA but along with what’s always been a model around stability and sustainability, but we’ve put a new clank in that whole model,” he said.

“Dual as a business is absolutely of the moment.”

Future plans

Dual was first established in 1998 in Spain, Howden said, as “a proper underwriting business”.

It is now “approaching £1bn worth of premium in 16 countries” and “has been at the forefront of embracing the digital and the data world” - around 95% of Dual’s business is conducted electronically, Howden noted.

Moving forward, however, Dual has ambitious growth plans.

Howden explained: “Dual is very, very interested in expanding both through acquisition and through attracting more talent.

“Unlike the broking group, which has no ambition to be a retail broker in the US, Dual is a very major underwriting business in the US and we will look to expand that underwriting activity in the US, just as we will in Europe, in the UK – where obviously we have a big business – and in Asia-Pac.

“You’ll see Dual looking both to attract talented teams and underwriters and put them into this slightly unique model, where there is both a partnership with other capacity providers but our own capital as well. But also, to acquisition other MGAs.”

In terms of the UK specifically, Howden added that there are also opportunities for Dual following Howden Group’s acquisition of personal lines broker A-Plan, which is expected to complete this month.

“A-Plan has got a big underwriting business as part of them already, KGM,” he said. “[This manages] £90m of premium already and clearly one of the things that we’re looking at is how do we expand our underwriting activities both for KGM and Dual in the UK market.”