Barry Reynolds: Verlingue London Markets ‘heavily focused’ on MGA market as it seeks specialist growth

Wholesale brokers should prioritise specialist expertise over price competition when seeking growth in a soft market, according to Verlingue London Markets executive director Barry Reynolds.

Speaking exclusively to Insurance Times, Reynolds notes that trading in the UK had “slowed” for the wholesale broker firm as “all of the London wholesalers are seeing a drop off in enquiry numbers because the company markets are absorbing more and their appetites are a lot broader”.

But, having served in the insurance industry for nearly 40 years, Reynolds is accustomed to handling the challenges the cyclical market brings.

He believes that this latest soft market demands that wholesale brokers “adapt” for growth – targeting added value for clients and “moving away from dealing with as much volume”.

He explains that, for his firm, this adaptation involves prioritising partnerships with brokers with specialist expertise, as well as becoming “heavily focused” on placing business in the MGA market.

With delegated underwriting accounting for around 45% of the Lloyd’s market’s premium income, Reynolds says that MGAs now resemble how “Lloyd’s used to be ten years ago in terms of the market and the trading environment” – with the added benefits of “stronger capacity” and “larger line sizes”.

“In this market, the opportunities lie in knowing that this is a new marketplace compared to what it was five years ago,” he continues.

“It’s very different. It gives us something that’s very specific to trade with, rather than all of our producing brokers having access to most insurance companies. There’s no point in me just bringing those insurance companies to them – they already have access.

“The MGA market opens up a new area of specialism that doesn’t exist, or may not be available, to those brokers.”

Niche opportunities

Verlingue London Markets’ “biggest success” in its specialism strategy has been motor trade, Reynolds notes.

This line was was introduced as a dedicated proposition during the firm’s’ rebrand from NBJ London Markets in November 2023.

He explains that the wholesale broker currently works with 36 motor trade brokers across the UK, which is a 50% increase compared with the previous quarter.

Verlingue London Markets currently specialises in property, casualty, marine, construction risks and motor, with clients serviced by a headcount of 12 staff.

But, the broker has also “started to open up into the tech-based industries” – including robotics, drones, data centres and infrastructure and aerospace – where Reynolds says he has seen demand for schemes growing.

He says: “We’re really focused on finding areas of business that are not mainstream, but where we know that the London market has something specialist to offer.

“These areas [covering advanced technology risk] are all very much in trial phases at the moment, but it’s [specialist risk] like that in which there are some strong markets in London that can really offer exactly the coverage required.

”What we then try and do is partner up with the right producing broker that has that [specific] knowledge and understanding.”

Future growth

While Reynolds is hunting these specialisms in the UK market, the broker is also applying a similar strategy to the overseas markets, with its biggest growth currently “coming out of Europe”.

Backed by French family-owned insurance broker Verlingue, part of the Adelaïde Group, Verlingue London Markets works with clients and broker partners across its operations in France, Italy, Portugal, Switzerland and the UK, while also supporting placements more broadly across Europe.

As the market is soft, Reynolds says that the firm “can afford to move into other territories and look to grow the business on a more balanced basis”.

But, preparing for the return of a hardening market is very much at the forefront of Reynold’s mind. He says that the priority for growth is “building a broker base” so that the firm can enter the changing market “strongly with the right group of brokers” on its panel.

He continues: “We’ve added a lot of brokers to our panel, [and while] we still have space for more, we will only add [brokers] that we think are the right fit for what we’re trying to do.”