The Hyperion boss once had ambitions to become a professional sportsman. Now he wants to be a top 10 player in global insurance. Ellen Bennett meets the executive who still likes to get away for a weekend’s surfing.
David Howden gets up at 4.30 every morning, to be driven from his Oxfordshire farm to his office on Bevis Marks in the heart of the Square Mile, where he is at his desk by 7am. Now that’s dedication for you. But this gentleman farmer has much more than cows and pigs on his plate: he wants to become a top 10 player in scores of countries around the world, in an ambitious mix of wholesale and retail broking and underwriting that has few parallels.
He hasn’t made a bad start. Just 45 years old, Howden is chief executive of Hyperion Group, a £220m gross written premium business, which has been handed £50m by private equity giant 3i. With £25m of that investment still to spend on acquisitions of existing businesses, start-ups or teams, he has only just begun.
Howden has come a long way since his first job in insurance, when he signed up at 16 to Howden’s, the Lloyd’s broker that was once run by his family and retained its name. He had wanted to play rugby professionally but had to give up his dream when he broke his back in an accident on the field. And as he queued for his lunch on that first day, an older colleague told him: “We all know why you’re here. It’s because of your name.”
Recalling that comment now, sitting in his stylish office surrounded by large pictures of his young family, Howden laughs. Tall and well spoken, with floppy hair, he has made his peace with that colleague (who was best man at Howden’s wedding) – and has proved him wrong.
In a whirlwind career that sits well with his rapid speech and boundless enthusiasm, Howden has worked at several major London brokers, founded his own business, been bought and sold and backed by investors, and started buying companies himself.
But let’s start with Hyperion, which seems to have a bewildering array of brands and businesses under its umbrella, not to mention operations in 17 countries. Most of its income – 56% of the £39.2m it made in 2007 – comes from wholesale, retail and reinsurance broking, under the Howden brand.
This is not the one-time family business that Howden started his career with (that has been subsumed into Aon), but one that uses the family name he took back when he started his own company in 1994. He even managed to retrieve the ancestral portraits, which now line the walls of the new Howden’s boardroom.
The company specialises in big-ticket risks, liability and, more recently, in major property risks, which it sees as a means of gaining a foothold in emerging economies. In 2007, the latest year for which figures are available, the broking business posted revenue of £21m.
The other half of the business focuses on underwriting. David Howden doesn’t believe consumers care about the distinctions between broker and underwriter that obsess many of his contemporaries and, besides, he likes to have a finger in many pies. The underwriting business operates under several brands: DUAL and CFC Underwriting, which may be familiar, and Avant in Spain and VK Underwriting in the USA, which may not.
Hyperion Group, which sits above all these companies, is run by Howden. If you thought that was confusing, try hearing it from him. Plucking names, dates and figures out of the air at a terrifying speed, he has a perfect grasp of his sprawling business – and of how he wants it to grow.
Enter 3i, one of the UK’s highest-profile private equity companies, which invested £50m in Hyperion last year, propelling it into the big league. Howden recalls: “We already had strong backing from [private investor and chairman] Brian Marsh but, if we really wanted to remain independent, we needed to have a stronger capital base and, to fulfil my ambitions and those of other people in the group, we needed more money to grow.”
There was a lot of interest from venture capitalists, with Lloyd’s brokers being seen as a relatively safe bet in the current climate, so why choose 3i?
Howden says the venture capitalists he talked to all asked him about his exit strategy. “But David Wildman [of 3i] started talking about the future of the group.”
The private equity company also had a track record in insurance, with stakes in Jelf and in Smart & Cook before it sold to AXA.
Half of the £50m stake has been spent on restructuring the partnership; the other half is sitting in the bank waiting for acquisitions. Howden reckons he is different from any other potential purchaser – he has the freedom to buy start-ups, with no need for profit-and-loss accounts to convince sceptical banks, to buy in teams, or just to back entrepreneurs like himself.
While his ambitions are global, Howden is currently focused on the USA. To date, Hyperion has only dallied in the world’s largest insurance market. But that’s about to change. He admits he wants to be “a player” in America and, following the acquisition of a team from Benfield in Miami last November, he expects more action on the other side of the Atlantic this year.
Howden is passionate about every aspect of his life and business, but he reserves his particular enthusiasm for the company culture. “We started with two people, so we used to have all our meetings in the pub; that creates a different culture – and I think that’s a good thing,” he says. “I love job creation, I love the fact that we employ people in new roles and create an entrepreneurial culture.”
Given all this, it’s surprising he has any time to spare. But as well as running that farm, he enjoys cooking the produce – “I make my own hams” – and surfing when he can get away to his house in Cornwall with his wife and three young daughters. “I’m not a genuine workaholic,” he insists, smiling. “I know people who are, and they can never switch off. On Fridays, I work from home and that gives me a work/life balance.”
That may be true but, any day of the week, you’d have to get up very early in the morning to outsmart David Howden.