Anthony Lumsden-Cook, managing director of the new high net worth venture Oak Underwriting talks to Alison Boyle about his ambition to be number one for service
Many in the industry have said it before – albeit people from the Lloyd's market: Lloyd's is the natural home for high net worth risks (HNW). With no two risks alike, the formula-driven approach of the composites is deemed wholly inappropriate.
Anthony Lumsden-Cook, former chairman and chief executive of HNW syndicate Cox Underwriting, shares this view. With the launch last month of his new venture, Oak Underwriting Services, he plans to take further advantage of the Lloyd's way of doing business.
Oak is operating as a virtual insurer from a base in the Cotswolds, its household risk carried by the Beazley syndicate (623).
So although it is not confined by the strict Lloyd's rules, much of the Lloyd's ethos prevails. For example, the company aims to adapt products and systems to fit the client rather than the other way around. And by starting with a small team and heavy investment in IT, the underwriters can focus on what they do best – delivering tailored solutions.
“I had a couple of offers when I left Cox, but the venture with Beazley stood out because I wanted to try something different with high net worth,” says Lumsden-Cook. “Beazley was already involved in the home-owners market and were keen to get involved in this sector.
“Oak has allowed me to re-research the market and see where the new openings are. I have looked at our competition and found that only a limited number of people can do this area properly. It is a Lloyd's-type risk as it needs some quite individual handling. It is not given to any form of mass-market approach.”
Service and innovation
The HNW market, according to Lumsden-Cook, is currently insured at around £80-100m – although the potential is nearer the £500m mark.
“Ten years ago, this market was insured at £30m so there has been growth,” he says. “It is quite a good market, but it is also a very personal market; you need to listen to your customers.
“Insurance has a bad public image. It is no use saying to the insured that you are not the opposition; you are on the same side as them. This is not enough. You have to give something back.”
Among the benefits of the bespoke Oak High Value Home policy is a £5,000 reward for all burglaries. The policy also pays out up to £15,000 towards essential home alterations if the client, or a member of a client's family, is disabled through injury.
“We are also aware that when someone is traumatised by a burglary, they are worried about returning to their own homes. We will therefore spend up to £10,000 towards upgrading security equipment.
“We aim to be a market leader in terms of service and user-friendliness,” says Lumsden-Cook. “We are not the largest HNW provider and that is not our aim. We would prefer to be a leader in terms of innovation and service.
“Monetary targets are not important, but we are confident we will be writing £2m in the first year and £4.5m in the second.”
Security and speed
The plan, according to Lumsden-Cook, is to give a quote within an hour and staff the company accordingly: “In the big companies, it can take two to three days to get an answer. We hope to recruit a new member of staff every three months.” Currently, there are seven members of staff – three of whom are ex-Cox employees – but Lumsden-Cook insists that it was they who approached him, not the other way around.
Technology has also played a crucial role in the launch. “We use electronic filing, which is a great advantage because nothing is held on paper. If someone breaks into our office they can't easily obtain details on the homes we insure. You need to insert a code number and postcode to access the details. I believe the investment will pay off.”
Oak has an agency base of 150 brokers and intermediaries and hopes to expand as more niche brokers spring up.
He admits that there have been teething problems with some brokers because when a new insurance venture starts up, it is hard to say no to the bad business. “We don't want to stop the broker doing business with us, but we can't be all things to all people.”
Although he finds that HNW policyholders tend to be more security-conscious and responsible, there are still bad risks out there. “I wish there was more dialogue with the rest of the high net worth industry, so that these sorts of risks didn't go round and round the market.
“When I left Cox, I didn't want to stop working. I felt I had a good three years left to my working career and I quite liked the idea of starting something from scratch,” he says.
So what will happen to Oak when Lumsden-Cook hits the golf course in retirement?
“I hate golf,” he laughs, “but fun days are important. They help you make friends in the industry. Whoever takes over from me in a couple of years would need to share many of the same principals – including the fun aspect.”