On the back of solid results and a climb up the rankings, JLT could have decided to stick to a proven formula. But its decision to restructure part of its UK operation shows that it’s gunning for further growth
JLT’s announcement that it is restructuring a significant chunk of its UK business, as exclusively revealed by Insurance Times yesterday, was a bolt from the blue.
JLT has had a lot of good news in recent months. In July, it reported a profit before tax of £76.4m for the first half of the year, up 9% on the £70m it booked in the same period last year. Just over a month later, the company discovered that it had risen to number two in Insurance Times’s Top 50 Brokers – disrupting the hegemony of the so-called ‘big three’ for the first time since 2008 as it dislodged Willis. The third-quarter interim management statement earlier this month was short on detail, but chief executive Dominic Burke reported that the company was continuing to make good progress.
If it ain’t broke …
So why change what looks like a winning formula? The shake-up is a big one, with JLT’s global risk solutions division managing director Ron Hayes out of the door. Hayes is an industry veteran, with nearly 30 years’ global broking experience.
JLT Specialty chief operating officer Warren Downey, who has emerged as top dog in the new arrangement, says that the restructuring will bring the company’s regional broking arm and its London-based global risk business together.
Across the market, as the bottom end becomes ever more commoditised, all brokers are seeking to push themselves up the value chain. By targeting increasingly specialist business, JLT is clearly seeking to find profitable niches.
The devil’s in the details
The road to hell is paved with good intentions. Rarely could this be said to be truer than for ELTO, or the Employers’ Liability Tracing Office to give it its full title. The idea is one that is hard to disagree with. The initiative is designed to enable injured workers to obtain compensation to which they are rightfully entitled to.
The industry was broadly content to support the initiative. It is less costly than the mooted next step, setting up an employers’ liability fund of last resort, like that which already exists for motor.
But the initiative’s practical implementation has been deeply problematic.
Insurers are increasingly turning the screws on brokers, demanding they supply them with employee reference numbers of their clients. But herding cats is easy compared to tracking down such details from many SMEs. Biba has templates to help brokers, which should make life easier. But for many intermediaries, the whole initiative is just another on a long list of regulatory headaches.
No comments yet