Markel UK attributes four star report rating to sustainability focus

Providing long-term, sustainable pricing and capacity is the key to success for insurer Markel, according to Nic Brown, Markel UK’s broker divisional director.

This approach has subsequently seen the insurer reap dividends, with Markel UK achieving a four star rating from brokers in this year’s Five Star Rating Report: Commercial Lines 2022, published by Insurance Times this month.

Over the last year, Markel UK has invested heavily in its teams and worked to meet claims obligations, Brown notes. The insurer is also ready to launch a new construction product this year.

However, it is the firm’s commitment to sustainability that is crucial, adds Brown.

He explains: “That is absolutely the most important thing. What we’ve seen in the past 12 to 24 months is withdrawal of capacity, withdrawal of providers from markets, price increases.

“Everyone gets used to hard and soft markets - the real word to describe that is unsustainable pricing and capacity. [This] yo-yos, but we haven’t done that.”

Whereas other carriers have withdrawn capacity, or stopped writing some lines of business entirely, Markel UK has opted to remain a stalwart market participant, meaning its customers have been insulated from the volatile rates of the past 12 to 18 months.

Brown continues: “If you’ve only got price to compete on, it works in your favour when you’re able to drop it - it works against you when you have to increase it. It’s one dimensional - commoditisation at its finest.

“We invest in having a much broader reason as to why people should buy from Markel. Pricing sustainability is only one of those reasons.

“The benefits you get from working with us, the support you get from the teams, the flexibility the of the ways brokers can trade with us and the advantages of the expertise that we have in specialist areas makes a huge difference.”

Benchmarking success

The response from brokers reported in this year’s Insurance Times’ Five Star Rating Report: Commercial Lines 2022 suggests that Markel’s strategy is working. It earned a four star rating, earmarking it as one of the top performing insurers in the report.

Brown says: “I’m really proud of what we’ve achieved. There are not many opportunities for us to benchmark like this within the industry, so we take this very seriously and it’s something that we use as a measure of our success.

“It helps us in looking at the areas of our business that we need to further invest in and pay more attention to.

“Brokers are rightly demanding very high standards from providers across all aspects, so it is all about delivering to a high standard over a long period [of time].

“We’ve had tremendous growth over the past few years and we continue to invest in people and systems.”

Markel has been a consistent performer in Insurance Times’ commercial lines report over the past few years. It scored five stars in both 2020 and 2021, alongside this year’s rating. Brown says this consistency is a result of the high standards the insurer sets for itself.

He adds: “Growing as quickly as we have has given us some growing pains and we’re invested in making sure the standards are consistent every year.

“There’s a number of things that go towards that. We’ve invested really heavily in our people, right across the business. We’ve made sure we’ve got the experience and expertise across our organisation.

“In the past 12 months, we’ve been putting good people on the ground, really focusing on our broker relationships.

“From a claims perspective, we did what we said we were going to do. We directed our claims teams to err on the side of caution when looking at Covid claims and ultimately pay the ones that were due. We didn’t want to use it as an excuse not to pay.

“From a trust perspective, our policies do what they say they are going to do - we know that has been a challenge for the industry as a whole.”

Establishing trusted relationships

Within the 2022 commercial lines report, Markel UK received its highest score from brokers for its quality of cover. The company believes that being a specialist insurer, as opposed to a carrier with a broad commercial portfolio, enables it to gain a deeper understanding of its customers.

Brown says: “We can affect our wordings, we can understand what [customers’] requirements are at all points in their journey. Policy terms and conditions are important, but so is making sure the claims team are focused around doing what’s right for the customer.

“Then there’s a string of value added benefits that we give to each sector, which completes the circle.

“We’re very fortunate with the legal and tax expertise that we’ve got because no one else in the market does that and we’re seeing that come to the fore. Because of our consultancy capability, customers are drawing down on that more than ever.

“Quality of cover is also trust. That’s the ultimate contract we’ve got between the broker, the customer and ourselves.”

Constructing new products

Markel UK is also planning to expand its product offering this year, targeting the UK’s construction sector – particularly trade level activity. The insurer aims to become more present in that market during the second half of 2022, Brown says.

He continues: “We are really well positioned to give some interesting, unique and innovative solutions.

“It is an area where brokers need more insurers to be able to provide the long-term, differentiated sustainable solutions that we can provide.

“The capacity issues in construction started happening way before Covid. There’s been a challenge because of the boom and bust, short-term capacity that’s gone in there.

“But, the market is now in a place where it enables [firms that] want to do more sustainable long-term solutions to go in and do that.”