’Our message is that we deal with brokers the way they want – we’re not going to force anybody to take an optimised trading route irrespective of premium size,’ says chief executive for UK regions

Having been formed in 2000, Arch is a relatively new kid on the block when compared to many other insurers. But at a market cap of just over £27.2bn ($34bn), the business – formed of reinsurance, insurance and mortgage insurance divisions – is by no means a small player.

Arch has maintained a London market presence in the UK since the setting up of Arch Insurance UK in London during 2004, but it was only in 2019 that the insurer made the move to expand its distribution to brokers across the UK regions.

Steve Bashford, chief executive for UK regions at Arch Insurance International – which fits into Arch’s insurance division and includes the UK, EU, Bermuda and Australia – has been at the firm for 13 years and was instrumental in the insurer’s move out from London and into the broker traded space across the country. 

Speaking exclusively to Insurance Times about the regional division’s strategic goals and growth, he explains: ”I joined back in 2011 at the beginning of Arch in the UK representing itself as something wider than just being part of the London market – in the UK our brand awareness back then was really associated with the London and Lloyd’s markets.” 

In 2019, Arch acquired the UK commercial lines underwriting segments of Ardonagh, including Geo Underwriting, Fusion, Arista and Towergate Commercial Underwriting.

Bashford says these businesses formed “the foundation of Arch’s UK regional businesses” and came with nine locations, which Arch has maintained in commitment to the broker partnerships it has developed in these areas. 

He explains: ”This was distribution we didn’t have because we were still predominantly London market-facing at the time. The opportunity to move into the small and mid-market regional broked space was a great opportunity for us and filled a real distribution gap.

”It was a seen as a highly desirable and necessary counterbalance to the London market presence that we have and it meant that we could grow and evolve more quickly. The opportunity to get the Arch brand more strongly out into the regions was the opportunity that was there and it came at just the right time for us.” 

Regional evolution

Since Arch launched its UK regional division in 2019 via the Ardonagh acquisition, the business has grown to three times the size it was at purchase in terms of gross written premium. The insurer has also grown staff numbers from around 250 to over 300, with extra underwriters hired to support “quick decisions for brokers”.

However, rather than targeting a repeat in this significant growth, Bashford says that the regional business is more focused on providing consistency of service and strong relationships to its existing broker partners while “growing alongside them” at a sustainable rate.

He explains: ”We’re not looking to triple in size again over the next five years – growth was inevitable for us because we were a new player in the market. Even now [five years after the regional business was launched] I’m still talking to brokers who see us as new to the market, which is great.

“We’ve got existing, proven and robust financial strength and reputation with the addition of people thinking we’re new as well, which is an enviable position to be in.” 

Arch’s decision to move into the UK regions five years ago was somewhat counter-cyclical, coming at a time when some other insurers were moving away from a model that saw them maintain a widespread physical presence across the country. 

At the time, many insurers saw the reality of costs that could be cut by centralising staff, but Bashford says he has always believed that the advantages of a physical regional presence outweighed the costs associated with maintaining it. 

He explains: ”It was strategically important for Arch because, where you trade with small or medium-sized commercial businesses there’s a very short broker chain that’s incredibly valuable. It brings us closer to the ultimate customer because we’re speaking to the broker that’s speaking to that customer day-to-day. Brokers need to trust that we understand what we’re doing and are good at what we do, which is a message best delivered when you’re closer to the end customer.”

And rather than the regional and London market businesses working in silos, Arch also made sure to design its distribution in such a way that the regional proposition “complemented what the London market teams are doing, rather than competing with them”. 

One of the major advantages of this system is that Arch is able to bring “London expertise to the regions”, says Bashford. 

He explains: ”The way we’ve structured the cascade of expertise down through the regions to the individual underwriters means that we can help them address some of the more complex needs that our brokers will bring to us. 

”Using that London market expertise, we’ve established specific initiatives around the regional business so that if, for example, a client has complicated exports to the US or manufactures automotive parts then we’ve got an appetite for it – we do that funky stuff all day long in the London market. 

“That means our brokers don’t end up having to wholesale into London to find a solution that should really be in the regions already.” 

Broker service proposition

Another major focus in Arch’s regional business is broker service, with the insurer achieving five stars in Insurance Times’ 2024 Five Star Rating Report for the second consecutive year.

In the report, which collects the results from the Broker Service Survey, the insurer also came out as the top ranked insurer for both overall relationship management and overall underwriting experience.

Bashford explains: ”Transparency is really important because it builds trust – and it’s trust that builds relationships over time. We’ve been really clear about focusing on our core products and expertise and addressing the fundamental needs of our commercial lines customers. 

“What we’re not good at is dreaming up new coverages and things like that, because it’s a distraction that takes your eye off the ball for the main job, which is delivering on the essentials really convincingly.” 

This focus is also demonstrated by endeavouring to be authentically responsive to what it is regional brokers are demanding from their insurer partners, says Bashford. 

He explains: ”We spend a lot of time talking to our brokers about what they wanted from carriers and all of our surveys showed that they want local access to experienced and empowered underwriting teams that can provide quick solutions.”

But being able to provide these things means not stretching staff too thin, which Bashford says has been a conscious choice for the business. 

“We never set out to be all things to all men,” he notes. ”We knew that we could never service the entire broker base in the UK, so the theory was to focus on the ones that we had good relationships with already and grow those to the extent that we could. 

“We have a comfortable number of broker relationships, so we always make sure that each individual branch doesn’t deal with more than 30 or 40 brokers, because otherwise it dilutes the proposition.” 

“Our message is that we deal with brokers the way they want – we’re not going to force anybody to take an optimised trading route irrespective of premium size.”