’If you build the right culture and you attract the right people, you get fabulous results – it’s blinking obvious,’ says group chief executive

The new “firepower” available to broker Specialist Risk Group (SRG) following its acquisition by Singapore-based Temasek Holdings and New York-based Warburg Pincus has begun “chapter two” of the firm’s growth journey. 

Speaking to Insurance Times this morning (22 May 2024) following news of the deal breaking yesterday, SRG group chief executive Warren Downey explains that SRG is now “going through the gears” in terms of building the broker that he started alongside group deputy chief executive officer Lee Anderson in September 2019. 

Since its launch five years ago, the “people and culture-focused challenger broker” has grown its staff numbers from 150 to 640 and now places £1bn of premium into the market, while placing 27th in the most recent Insurance Times Top 50 Brokers Report with revenue of £67.6m.

Downey explains: “Four and a half years in, we’re definitely not done. The news this week is, for us, part of a longer journey. September 2019 to January 2024 is chapter one of SRG – and we’re just starting chapter two.”

“As we’ve grown, we have a need for greater resources and capital to keep up our momentum – to go faster and go more international.” 

Strategic goals 

In seeking the backers for SRG’s next chapter of growth, Downey says that his team opted for a “curated process” wherein only those investors who understood the value of the firm’s people-focused strategy were considered viable. 

He explains: ”This was about aligning ourselves with people that are both culturally and strategically aligned. What I love about private equity is that if you like execution and going fast, then they’re the right people to have around your board table.”

A major facet of the need for new backing at SRG was the desire to internationalise the business and expand into new markets across Europe and Asia, which it has identified as a growth vector. 

Explaining SRG’s focus for the next six years, Downey says: ”The big theme for chapter two is more of the same, plus international.

”More of the same is organic growth, bolt-on acquisitions at home, gathering specialists together and entering new segments – but becoming a much more international firm is a major theme.” 

SRG is looking to “east of East London” for new markets where it can establish a physical presence, with the plan to “build domestically relevant businesses with specialisms that are relevant and then following those specialisms” to new opportunities in those markets. 

Alongside this, the broker is aiming to become a domestic retail player in new domestic markets and is seeking out businesses with “strong and compatible cultures” that it can acquire to establish a beachhead.

Downey notes: “We needed this reset of capital to take full advantage of international, so we wanted the depth of resources and we wanted investors that had a lot of experience internationalising firms – so there’s a very specific reason we went with [Warburg Pincus and Temasek].” 

More of the same

With the private equity acquisition of a broker can come extra pressure, but Downey says that SRG’s new investors are absolutely on board with its philosophy of focusing on people and culture. 

He explains: ”Let’s be clear, if any private equity-owned broker tells you that the private equity firm doesn’t have control, they are lying to you. However, despite that, our take on it is that private equity works for us – we don’t work for private equity.” 

Throughout the process of securing this new investment, Downey says that the message of SRG was well received. 

He explains: “We are obsessed with numbers and we’re all about growth, value scale and relevance. But don’t be confused, we build it all off people and culture. 

“Our results suggest that it’s a reasonably good strategy – if you look at what we prioritise as a firm and what we’ve done with this business over the last few years, then you’d have to work pretty hard to explain how those two things aren’t connected to each other.

”If you build the right culture and you attract the right people, you get fabulous results – it’s blinking obvious.”

Downey says that the business advantage of building a strong culture with the right talent is especially important in the specialist areas SRG operates in. 

“It tends to make the business stickier,it tends to make it easier to win and it tends to have slightly better economics – so we say people and culture first, specialism second and everything else after that.” 

With the firepower of international investors now behind SRG, Downey says that this focus is crystallising SRG into exactly what he intended to build. 

He finishes: “As we go into chapter two, we are beginning to see evidence of the thing we set out to become, which is the natural home for specialist people and businesses.

”This new, refreshed investment will only accelerate that so that we can meet our true destiny – whatever that is.”