Having successfully shipped his property owners’ team from Norwich Union to Allianz Insurance, David Cooper tells Andrew Holt of his growth targets and future plans
hen David Cooper jumped ship from one leading insurer to a leading rival, he had to make sure the vessel he was commandeering was not going to sink, leaving him up a creek without a paddle.
The early signs are good. His move from being head of Norwich Union’s (NU) London property owners’ last June to join Allianz Insurance in the same role has been a fruitful journey.
He has achieved the first year target of £10m in nine months. And he was hoping to reach £15m by 30 June, which he has also achieved.
But like any captain, he is only as good as his crew. It was a positive for Cooper that the mutiny from NU was full blooded, with all his team following him to swap ships.
“We had taken the [NU] business as far as we could, from £50m to £175m and it was important to take the next step,” says Cooper on the rationale behind the move.
NU bosses were not impressed and told him to walk the plank, suspending him in the process. “It is fair to say they were not happy,” says Cooper. The crew of 12 include many experienced staff.
The approach NU took in trying to prevent the mutiny was interesting. “They spoke to each member of staff individually to convince them to stay, but they underestimated the team ethic we all hold together. Within 48 hours they knew our positions,” says Cooper. None budged an inch.
With that Cooper and his team departed. “Some of the team could join in a month, but I was put on gardening leave,” he says of the legal processes each member had to endure.
Developing business book
It wasn’t a case of building a new ship entirely, as Allianz already had a London property owners’ vessel but there was a demand to sail in deeper waters.
“There was a team of five to build on, and it had grown in the three years previously to a £20m business.” But Allianz’s aim was to build this up substantially and it needed the crew to do it.
Making the move was all the more easier given the support Cooper and his crew got from the captains of the Allianz Insurance business. “We had huge support from Chris [Hanks] and Andrew [Torrance].”
The Allianz London property owners’ team has three years to put on a further £35m in business and five to put on £100m. “There were exp-ectations in what we bring to the business at set out at the nego-tiation stage,” says Cooper. And he adds: “We have created a business with a wider breadth of brokers.”
Developing the company’s book of business for the division is key to Cooper’s responsibilities and he now heads up a team of 23 with Allianz’s structure meaning that sailing beyond local waters is part of the business outlook. “Working with Allianz Global, we have a seamless operation, globally,” he says.
It is within the broker market that it is becoming strong competitive waters. “We have key broker relationships with all the major commercial brokers, Aon, Wills, Marsh, Heath Lambert and the bigger national brokers have been taking a bigger share of this business. But other professional brokers like Stuart Alexander and Layton Blackham work well with the medium to smaller end of the market. There is a lot of expertise out there in the broker market, but dealing with large corporate clients, larger nationals have the edge.”
And what about AXA buying brokers? Doesn’t this muddy the waters of the broker-insurer re-lationships. “In the short-term the placing of business is not an issue. But it could be in the long term,” says Cooper.
Like elsewhere, the London pro-perty market is soft. On the overall view of the market Cooper says: “The market will be soft for 2007 and in 2008 we will see an upturn which will last three to four years with premiums rising 4% – 5%.”
According to property consultant DTZ, the commercial marketplace continues to attract core investors with capital inflow reaching £69.5bn in 2005 alone. DTZ says the UK market was also extremely liquid in 2006 with £49bn of commercial property transactions, largely in the office and retail sectors. Of this, over £19bn and 505 transactions occurred in central London.
According to Aon, certain capacity terrorism hotspots like Canary Wharf, make it difficult to obtain acceptable premiums for new risks. Cooper says this is not the case. “We see that all areas are available for cover. Tower 42, Canary Wharf, they all can get cover.”
London property owners themselves are a diverse bunch. They can be vast behemoths like British Land or Land Securities controlling billions of pounds; pension funds, banks and insurers who want to diversify their range of property investment; or small personal investors with a portfolio of a handful of properties.
Events such as the London Olympics have created opp-ortunities for investors to purchase new venues that could rise significantly in value in London.
The sale by Swiss Re of Lord Foster’s Gherkin in the heart of the City for £630m is the most a single office block in the UK has ever fetched. Allianz and Cooper, interestingly, have this covered. Cooper’s team also has recently had much success employing two blue-chip clients to add to his growing list of blue-chip companies.
Cooper says: “At least two major wins secured by the team have been driven primarily on service commitment rather than price.”
But having been a mutineer from one ship does he not fear that his team could leave him? “I hope not. It is not something I have thought about. We are a closely connected team and work very well together and I hope will continue to do so for some time.” IT