Hyperion has increased its global reach, boosted its annual return to 37% and jumped up the Top 50 broker league, and it is still pursuing opportunities. Andrew Holt talks to the men at the top
In the week in which a new 007 was unveiled, David Howden, chief executive of Hyperion Insurance Group, is keen to show that for him the world is almost not enough.
Since its launch 12 years ago the broking and underwriting group has achieved a global reach encompassing businesses in India, Israel, Germany, Spain, Italy, Sweden, Finland, Iceland, Australia and the US. It has everything apart from Russia with love.
"Insurance business is not just in the UK, it is international and the whole world," enthuses Howden. And this internationalism has left Howden himself with gold fingers. The business has seen an annual compound return of 37% since inception.
Business critical risk
The group has two major parts: an underwriting arm, Dual International and Howden, on the broking side. The latter was built on its reputation as a Lloyd's broker with an expertise in professional indemnity and D&O. This was expanded three years ago, with an emphasis on wider business critical risk. In those three years, revenues trebled and profits have grown by a compound annual rate of 42%.
Howden chief executive Tim Coles says the growth is due to a simple philosophy. "We embrace and welcome change. We seek out and identify new business segments and markets and then knock them over.
"But our expansion is dictated by our clients and their needs. What many of the bigger brokers forget, is that insurance and broking is still a people business."
And the modern methods of some brokers leaves David Howden puzzled to the point he looks like he has been hit by a thunderball. "You look at what much of the broking market is doing today and its practices, especially at Lloyd's, and they are the same as 10 years ago."
As a result of this evolving activity, Howden has jumped up the Insurance Times Top 50 Brokers league table for three years in succession. In 2002 it was ouside the list. Then in 2003 it came 48th, subsequently moving to 36th and then 28th in this year's table.
Having a licence to more international business, Howden, recently added its own Bond to its operation when it entered the international property market establishing a specialist new division. Led by Bond, Philip Bond, the former managing director of worldwide property at PWS, Howden Property focuses on delivering insurance solutions for complex and catastrophe-exposed risks.
The international property market is worth an estimated £500bn in premium, and Howden Property is aiming to achieve the lion's share over the coming years.
"We look at new business areas and move into them until we have them covered and are number one," says a confident Coles.
Venture capitalist group BP Marsh & Partners owns a quarter of Hyperion Insurance Group and has done since day one. Doesn't this mean that one day soon, it will want an exit leaving Hyperion in need of other backers?
"It is quite amazing really, but Brian Marsh [BP Marsh's chairman] is in with us for the long-term. He is a good friend and doesn't want to cut from the business," says Howden.
But surely building a group up this fast, is a sure sign that Howden is creating a business he will want to sell-up and enjoy a few martinis in some exotic part of the world he has yet to conquer?
"Not at all," says Howden. "We are in this to build the business up and keep building and not to sell up. We are definitely not for sale."
In reporting an increase in profitability of 94% in 2005 in Hyperion's broking, underwriting, and reinsurance businesses, Howden says the company has bucked the downward pressures on revenues and margins in the global insurance market.
And the group's revenue for the first six months of its financial year was £15.8m, an 18% increase on 2005. Profit before tax rose to £3m from £2m in 2005. Howden, says: "I am pleased with these results given that the market background, particularly in London, continues to be challenging."
This is in part what Howden believes is the group's entrepreneurial approach. The group recently completed an internal £5m fund raising exercise to raise a war chest to fuel its further expansion into new product lines and territories.
"We are pursuing business opportunities both in the UK - within the regional broker market and overseas - including targets in Asia and the US," says Howden. Although he is unwilling to expand on exactly who these regional UK brokers are.
Its commitment to this expansion was highlighted in August, when Hyperion acquired Coselusan Correduria de Seguros SL (Coselusan), an insurance broker based in Barcelona.
Howden says of the purchase: "Spain's economic growth has outpaced the European average for nearly 10 years. Studies show that the Spanish commercial liability market is one of the least developed in the EU, and we see tremendous opportunities for companies such as ours."
It focus on new products was also shown when Howden launched a professional indemnity insurance scheme for accredited asbestos inspectors that includes cover not available under any other policy in the marketplace.
The scheme, backed by a panel of leading insurers, was developed to support the first and only register of UKAS accredited individual asbestos inspectors - the National Individual Asbestos Certification Scheme.
Howden confesses: "We are very specialist in our approach. We are not all things to all people."
Howden's aim is to reach over £100m in brokerage in four years, equating to a quadrupling of current business, and putting it within spitting distance of the broker Top 10. Knowing you only live once, Howden could be called Goldenballs.