Poker champion Graeme Newman took a risk when he sold his technology broker and joined cyber liability giant CFC Underwriting when there was limited knowledge of the market. He tells Lauren MacGillivray how he will achieve 50% premium income growth by the end of the year.
When Graeme Newman is not developing cyber insurance products, he is known as Grazza – a lean, mean, poker-playing machine. Two years ago he scooped a cool $230,000 (£115,000) playing in the Ladbrokes European Online Championship of Poker, beating 400 opponents over 13 hours.
He’s now gearing up for the Full Tilt Million Pound Challenge, to be held in London later this month and televised on Sky Sports. He was one of 80 online players to qualify for the live event. The overall winner will then face three professionals and pocket £1m if they can beat all three.
“I’ve always liked to gamble a little bit,” he says understatedly. “It’s all about risk, isn’t it? Insurance is all about risk, poker’s all about risk, so there’s a theme that runs through. I’ve always been interested in that kind of thing.”
Newman’s overtly ambitious attitude should suit him well in his recent appointment as business development director for CFC Underwriting, where he is expected to lead the business to an aggressive target of 30% growth in premium income by the end of 2008.
Never a man short on confidence, he says the company is on track to surpass that target and post an increase of 50%. “I took a big gamble doing what I am doing and hopefully it’s going to pay off. There will be even more aggressive growth plans for next year,” he says.
At 31 years old, Newman’s CV is impressive. He studied economics at the University of Warwick, and then joined Deloitte as a management consultant, concentrating on IT systems. Within two years, he became the youngest senior consultant in Deloitte’s global business at age 23.
His biggest project was working on the controversial congestion charging scheme, working with a lead partner who reported to former London Mayor Ken Livingstone.
After five years with Deloitte, Newman grew restless and was eager to get a taste of the action during the dotcom boom. He set up a risk management company called Digital Risk Solutions and co-founded a subsidiary, DRS Insurance Services – a specialist broker for technology and new media companies.
The broker eventually became the main company of the two. It was through DRS that Newman got to know CFC Underwriting, and he ultimately decided to sell DRS to Oxygen and join CFC.
“I took a big gamble doing what I am doing and hopefully itâ€™s going to pay off. There will be even more aggressive growth plans for next year.
“The sell from CFC to me was, ‘you do what you’re doing now, selling tech professional indemnity insurance to UK companies, and developing products, and we can provide you with a proper team and internationalise your business overnight’,” Newman says.
London-based CFC underwrites insurance on behalf of 16 Lloyd’s syndicates and is part of the Hyperion Group. It is best known for its cyber and tech professional indemnity (PI) offerings. Cyber PI covers companies that sell technology services, such as software developers, while cyber PI is for companies that rely on technology to run their business.
Recently, CFC – which provides the Biba scheme for cyber liability – launched miscellaneous PI in the UK. Outside the UK it offers insurance for US nursing homes, PI for Australian and Canadian professionals, and municipal insurance for the Canadian province of Quebec.
Newman is keeping his cards close to his chest about how he plans to improve premium income growth. But he says the company will be launching new products and making the existing products more appealing.
He adds there will be a revamp of marketing, a relaunch of all products, and he would do his best to inject more fun.
CFC sells its products only through intermediaries, and its network ranges from the five largest global brokers through to local, specialist brokers. It deals with brokers based in over 15 countries.
When the company was established in 2000 it specialised in tech liability. At the time, the product was immature and in some ways a reaction to the rush of businesses setting up online.
But the company has since refocused its efforts on providing PI to companies with genuine growth, and expanding its product line both in the UK and overseas.
“CFC learned how to localise policies and build an international distribution network. We also like trying to find areas where risks are poorly understood and mis-priced,” Newman says.
“CFC learned how to localise policies and build an international distribution network. We also like trying to find areas where risks are poorly understood and mis-priced.
For example, Newman says there is strong opportunity for growth in PI for online gaming companies, which are a booming industry in Gibraltar and Malta.
CFC prides itself on having a flat management structure and Newman has a close relationship with the company’s managing director, David Walsh. Walsh has welcomed Newman aboard to spearhead the business’s expansion in both the products it writes, and its geographic scope.
“I’d been working with it a lot and built up a very good relationship with Dave,” says Newman, referring to when he was running DRS. “There are very few experts in the London market when it comes to insurance for technology companies. It’s a growing area and it was CFC’s main focus. I developed some products with it and the way we worked together was very good.”
The company has a staff of 20, which is split evenly between underwriters and support roles.
“Brokers can speak directly to the underwriters,” Newman says. “We don’t have to refer people up the chain. We do client meetings as well, which is part of the strategy of going broker-only and not going direct. You’ve got that trust and people are quite happy to bring you into the meetings.”
In less than two weeks, Newman could potentially win £1m. With a wife and six-month-old baby boy Finlay, it would be understandable if he decided to walk away from his job if he were to claim the jackpot.
But with his best poker face, he says: “If I won £10m tomorrow in a poker tournament, I would come in the next day and I’d be happy. I’ve sold my business and I made a lot of money out of playing poker. Financial motivators aren’t everything for me now.”
What do you think; is he bluffing?