Specialist loss adjuster Garwyn wants to move up the pecking order and work with the UK’s bigest insurers. Chief executive Declan Treanor explains his strategy to Michael Faulkner.
Last year was a turbulent time for Garwyn. The specialist liability adjuster lost a major contract with Equitas, the Lloyd’s run-off vehicle, and underwent a restructuring that saw a significant number of staff including three senior executives made redundant.
But the company’s chief executive, Declan Treanor, says the company’s difficult times are now behind it and that it is gearing up for growth. The spectre of further staff cuts appears to have gone and the adjuster is eyeing new markets and hiring staff.
Garwyn recently appointed former First Assist chief executive Tim Ablett as a non-executive director to help its growth plans. It has also set its sights on potential acquisitions with the possibility of a deal completing this year.
While Treanor, a soft spoken Irishman, is looking for growth, he is not seeking to grow to the scale of heavyweights Crawford & Co, Cunningham Lindsey or AMG.
“I am not looking to be number one, two or three [in terms of size], but I am keen to grow the business. I want to be top of the second tier of adjusters. We are around number six at the moment in terms of revenues,” he says.
Garwyn reported revenues of over £17m in 2006 and pre-tax profit of £2.2m, according to documents filed with Companies House.
The company has yet to file its 2007 figures. Treanor says revenues dropped a little during the year, but the company is still profitable.
The decline in 2007 revenues hints at the challenges faced by the company during that period. Treanor says that the soft market took its toll on the business forcing it to reorganise and streamline. Three offices were closed and jobs were cut.
“We are a niche player. If our market is affected by soft premium rates, our principals don’t have the same amount of work. We had to lose 50 people, it was difficult,” he says.
Garwyn employs around 230 staff, so the redundancies represented a significant proportion of its workforce.
The loss of the Equitas account, which followed the decision by Equitas owner National Indemnity to handle claims in-house, led to Garwyn’s deputy chief executive Stephen Ford and two other senior executives, Matthew Brook, the technical director, and quality and compliance director Simon Hiscock, being made redundant.
“The loss of the Equitas contract was a shock; it was a blow, but they gave us a strong endorsement, saying we had a world class service,” says Treanor. He would not reveal the size of the contract, saying only that it was significant.
“Historically, people have wanted to work for Garwyn. We are an employer of choice and we want to continue that
Garwyn’s restructuring is now complete and further redundancies are not expected at present. “We are now looking at people and systems,” says Treanor.
“Historically, people have wanted to work for Garwyn. We are an employer of choice and we want to continue that. We want to make sure we retain good people and ensure we get the right skill set that will enable us to grow. We have been concentrating on developing skills to make operations scaleable.”
The appointment of Ablett is a key hire for Garwyn. The company is looking to tap the composite insurer market for clients – not its traditional feeding ground – and Treanor believes Ablett’s experience will be vital. Ablett held senior roles at Groupama and RSA, prior to joining First Assist.
Treanor says: “Our traditional markets are the next tier down from composites. They are tier one and we are in tier two. We are looking to work with the top tier. We have had a number of successes in recent months, for example we have been approached for the Sterling account.”
He adds that developing a flexible service is vital if Garwyn is to successfully win business from composites such as Norwich Union and RSA.
He says that over the past six months, through its restructuring, the company has been able to address this and become more flexible in the services it offers and its capability to deliver them.
He says Garwyn now has investigators around the country, supported by a central claims management unit in Birmingham. “A year ago we would have found that difficult,” he says.
Treanor says Garwyn is also addressing its pricing to meet the requirements of the composite market: “The composites are price driven. We are looking at our pricing. We are very competitive in our pricing and our ability to provide a service.”
He believes that being able to demonstrate in financial terms the benefits of Garwyn’s service is crucial. “We were able to show a major client that for every £1 we save it we charge it 6p.
“In 2007, were able to show that we saved clients £100m on claims spend with a 42.3% repudiation rate across our book of business. The ABI rate is less than that.”
Garwyn is also looking at expanding it product lines and is considering the possibility of broadening its expertise beyond its core liability specialism.
The company is now offering a legal costs negotiation service for clients. “A lot of costs negotiations go to solicitors. We can better serve our client by doing this in-house,” says Treanor.
He also raises the possibility of bolt-on acquisitions, which could be used to widen Garwyn’s services. “You might see something in the course of the year,” he says coyly.
Garwyn in brief
Garwyn was founded in 1971 and claims to be the largest specialist liability adjuster in the UK.
Chief executive Declan Treanor joined the company in 1979.
Garwyn has had a number of owners, including Lloyds insurers Bankside and Limit, and more recently Australian insurer QBE.
It was sold to its management at the end of 2005. The deal, estimated to be worth Ã‚Â£20m, was backed by Barclays Capital Ventures.
The aim is to buy Barclays out within the next seven years, in a two-stage process.
Garwyns services include disease and illness, construction, major loss and claims management.