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2026.09.29 | TB | Insurance | Ardonagh Group: UK SME & Retail

原标题：The Ardonagh Group – UK SME & Retail Deep Dive & Expansion Opportunities

#financials

Third Bridge · 2026-09-29

Analyst-led • 21 Sep 2026

Companies: AJG US

Greig Marshall (GM) Senior Claims Executive at Marsh & McLennan Companies Inc (Marsh)

Max Harper (MH) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

MH [00:00:01]: Welcome to Third Bridge's Interview entitled The Ardonagh Group – UK SME & Retail Deep Dive & Expansion Opportunities. I'm Max Harper, and I'll be facilitating today's Interview with Greig Marshall, former Head, Claims at The Ardonagh Group Ltd.

Before we start today's Interview, please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

GM [00:00:32]: I agree.

MH [00:00:34]: Could you please start with an introduction to your background?

GM [00:00:41]: I have been in financial services and particularly the insurance industry in the UK for over 30 years, working for a mixture of insurers and brokers primarily in the claims sector and primarily within that, up until recently, mainly in the commercial lines space as well as having knowledge of other lines. Like I say, a mixture of broker and insurer backgrounds and gathered a wide range of information over those 30 years.

Questions

00:01:22] In 2025, The Ardonagh Group signalled that it managed about USD 18bn in premiums globally, making it one of the world's largest insurance brokers. What percentage of GWP [gross written premium] do you think comes from the retail SME market in the UK, and over what lines of insurance?

GM [00:01:52]: I think in the ballpark of 25%. I'm aware of there being about 30-35% of the book being UK-based and the rest of it being more international. I'd be comfortable seeing that somewhere between 23% and 27%.

MH [00:02:13]: What are the key lines of insurance within that? Is it motor, home, property, etc?

GM [00:02:23]: The split, generally speaking or roughly speaking, is about 65% motor. Then the next 30% is split pretty evenly between property and liability, and then the remaining 5% is the more minor lines or speciality lines.

MH [00:02:48]: Do you see that split evolving, and are there any opportunities for growth within those lines?

GM [00:02:59]: I can see them changing, but not significantly. I think they put a lot of eggs in the personal lines motor basket. I think that's just the space where they're comfortable in. Everything else, there's the opportunity to grow certain lines, but I think what they're better known for is heavy on the personal lines motor stuff and the SME motor stuff. Probably, again, an area of growth for them has been more farming. Again, there's an opportunity to get a greater share of the market in there, but from a property perspective, I don't see those numbers shifting significantly, especially in view of some of the recent acquisitions, which were heavy motor. I don't see those numbers shifting significantly in the next few years.

00:03:57] Do you see any benefit for Ardonagh UK arising from the international network?

GM [00:04:11]: I do, but I haven't seen much from a UK perspective. I think a lot of it was down to… That was a difficult market. Certainly, when I was there, that was a difficult market. It was a difficult market, and growth was difficult to achieve. They went through a rebranding. Part of this was to enable double-digit growth, but against the backdrop of a very difficult market and also heavy on the mergers and acquisitions. They should have been able to lean… I think they were able to lean on the more international side, more from a stability perspective while they allowed the UK personal lines SME business to try and grow into a more profitable space.

MH [00:05:09]: Primarily for stability, but why do you think that benefit hasn't been felt yet?

GM [00:05:16]: My own belief, and this is just my opinion, is that a particular strategy wasn't stuck to. There was a little bit of a scattergun approach when it came to mergers and acquisitions and also why the business wasn't growing the way it should be. Again, there's a number of factors in this maybe I'll come out with some of the other questions. I think the UK strategy was clear in terms of what the expectations were, but the execution wasn't carried out as expected, and there was a lack of focus on actual, what you would call new, new business, so actually going out and sourcing new business that doesn't have any links to your existing business because these numbers were muddled by acquisitions. It doesn't artificially inflate the book, but it makes the new business figures look a bit better. I think an eye was taken off the ball with regards to how new business should be targeted.

00:06:32] Do you see Ardonagh working to correct the mistakes – such as the scattered approach to M&A, the failure to execute the UK strategy as expected and the lack of focus on sourcing new business – to realign with the business plan, which potentially was not stuck to? What might that entail? How long might it take to get back on track, and does it cost anything?

GM [00:06:53]: I think what they've attempted to do, again, just my view, what they had attempted to do initially was I think they've bitten off too much. 2024-25, they've bitten off too much in terms of what they wanted to do. No CEO or no top man that's running the UK business is going to scale that back because that's the strategy rightly or wrongly. What we have seen following on from that is more of a cautious approach to mergers and acquisitions in terms of the year. I think it was 2025, there were 10 acquisitions. Trying to integrate 10 businesses into a larger business is very difficult when we're trying to execute other strategies that you've got in place. I think a more cautious approach to mergers and acquisitions. I think they've done a little bit of streamlining in terms of staffing models, but again, to my mind, they still haven't addressed one of the major concerns. I'm not convinced that they have… This will sound a little bit bitter, I think, but I'm not convinced they have the right people in the right roles sometimes. What I mean by that is from a sales perspective, I don't think they do a good enough job or are not accountable enough in the frontline roles that are going to have.

MH [00:08:28]: Reallocating people would allow the company to get back on track. Is that summarising what you're saying?

GM [00:08:43]: Yes, it does summarise that. It's also very difficult. I think they were keen to make such a splash 1.5 years ago that I think they perhaps underestimated just how difficult it was going to be to integrate all the different facets into a business without there being a few mishaps along the way.

MH [00:09:11]: On the flip side, are there any downsides from the international network?

GM [00:09:20]: Not that I can see. I guess if you don't tap into it enough, then by extension, it's a downside, but I don't really see it being a downside per se. No, I would say no.

00:09:36] Ardonagh merged a number of its UK retail personal lines business under Atlanta Group into Markerstudy Group in June 2024, while keeping some under its Everywhen brand. What are the pros and cons of the divestiture towards Markerstudy?

GM [00:10:00]: I think it's quite difficult to answer that because the Atlanta, they've gone from being more of a minority stakeholder now.

MH [00:10:21]: I think Ardonagh has a 23% stake in Markerstudy.

GM [00:10:26]: I don't really see that, again, outside looking in, I don't really see much synergy. I think one of the critical things around certainly the UK market has been name and brand awareness. It's, we've got all these different brands within our brand. Then the Ardonagh name, which was never considered to be the trading name, that particular… I think it's caused a little bit of confusion. I think that was recognised, and I think they are going some way trying to simplify. I think we are in a personal lines market, a heavy personal lines market. I think people need to get that clarity of thought, and they need things to be explained properly to them, so they know exactly who this business is connected to.

I know we'll talk about it further down the line in terms of some of the names within the Ardonagh name, if you like, but I've always seen it, and I've tried to explain this to people in the past, I've always seen it as a bit of a Lloyd's marketplace where there's this big umbrella, which is Ardonagh, and then there's lots of little different companies within it. Some of the staff internally don't know what the differences are, never mind be able to explain that to the marketplace and to potential clients and existing clients. It's a bit of a long-winded response, but I'm not really sure that had any real clarity, and it certainly hasn't impacted the UK market as you might have thought it would.

MH [00:12:17]: What did Ardonagh aim to achieve with the partial divestiture towards Markerstudy?

GM [00:12:31]: I don't really know the answer to that. I don't really know the answer to that.

00:12:38] How substantial would you estimate Ardonagh's Everywhen is as a business vs Markerstudy? What are the areas of overlap, and how different are they in reality?

GM [00:12:54]: Again, as a comparator, you just don't see it. Markerstudy are never mentioned. Obviously, it's all Everywhen, and Everywhen as the business has been trying to come up the league table in terms of size of business in the UK. Again, going back to the acquisitions part of it, that was the strategy that they adopted, but probably hasn't moved them on. Let's be honest, they're not going to be able to break into the Aon bracket, but to be fair, it's a big enough business in terms of… They've got roughly what, 5,000 or so employees. They've got fingers in lots of pies, the length and breadth of the UK and the might of the Ardonagh Group behind them. In terms of how they compare to Markerstudy, it's just not something that's ever… It's never been held up as a comparator or even a discussion point as far as I'm concerned.

MH [00:14:50]: Do you see any benefit arising for Ardonagh from the stake or the ongoing relationship that exists?

GM [00:15:01]: I can only give you an honest view on what I've seen so far, and it's no at the moment. Again, because it's not really been spoken about, and we've seen no evidence of what the relationship is supposed to yield. I'm not saying there isn't one. I just don't see it at the moment.

MH [00:15:22]: What benefit could it provide in theory?

GM [00:15:24]: In theory, I suppose if you combine them, it can give you a broader reach in the market. It can give you access to lines you perhaps don't have, give you access to a pipeline they perhaps don't have. I guess that was probably in the thought process. It's just as a joined-up process, there's little evidence of it, certainly visible evidence of it that we've seen so far.

00:15:54] What are your thoughts on Ardonagh's SME positioning? How strong are the company's brands, such as Towergate and Footman James?

GM [00:16:06]: Towergate was a dominant name, if you like, but as a brand, it become… I don't think I'm speaking about… It's obviously just my opinion, but if you ask others, I'm sure they'll come up with the same. It become a little bit of a toxic brand, but at least it was a known brand. I fully understand why they would want to be shift away from using the name Towergate in the UK. The Footman James, I think Footman James is still a strong brand.

MH [00:16:38]: Why was Towergate a toxic brand?

GM [00:16:40]: It wasn't known for good service. I think they really suffered in the service industry that wasn't delivering from a customer perspective, whether it's good outcomes and claims, whether it's good communication, whether it was good systems. It was a long road back for Towergate. I think I'm almost certain that it was a real topic of discussion when we were looking at name changes and mergers and acquisitions. Like I said, when I was there, I never had any reference to Towergate. There were still a lot of other people that had been there for longer who would have Towergate in their e-mail address or would answer the phone Towergate. My e-mail address was Ardonagh. There was a real move to shift away from the old Towergate brand and try and reinvent itself as a better, bigger service provider. With any name change or brand change, these things take time to wash through, but there was a conscious effort to do that.

MH [00:17:57]: How about the other brands, such as Footman James, etc?

GM [00:18:03]: I guess Footman James is still… Their office is closer to London. I think the Footman James brand is still strong. In terms of the brands that you listed in the question, I wouldn't have anything negative to say about those brands for two reasons. (1) I don't have the same amount of knowledge about them. (2) I don't hear as much as in the brand itself. I think a lot of people actually would have thought to keep those names front and centre rather than have a full name change. I think there's still a lot of positives with the way that the more local and actually smaller names where Towergate was a more overarching personal lines business, whereas I think there was a more personal touch in the likes of Footman James.

00:18:54] What would be the benefit of keeping brands separate vs integrating them under one roof, considering the Ardonagh strategy?

GM [00:19:09]: I don't think there's much of a benefit. I think you have to do it. Because otherwise, it looks as though you are half-heartedly going into a name and a brand change, and therefore, what message you're trying to get across to the market. I think these things take time, and sometimes it's agreed that certain brands, because of the lines of business that they are focused on, that they take a little bit of time to wash through into what the new brand would be. Ultimately, it all has to change. It's maybe just a more tiered or layered approach to it.

00:19:48] How successful do you think Ardonagh's strategy of broker roll-ups has been? What are the pros and cons of organic growth?

GM [00:19:56]: Certainly, the pros were it allowed them to look as though they're growing as a business if they're able to bring in those other GWPs from other businesses. That's fine, but that should work in tandem with your own individual growth strategy. That is a pro, but that's only going to be… The con automatically to that is that's fine for this year, what next year rather than having a more thought-out five-year plan, etc. There's two major cons the last year, again, just my opinion. They tried to bring in too many within a 12-month period. I was involved in a lot of these acquisitions. It was very difficult to work out what the strategy was because a lot of these would be high street small brokers, a dozen people, maybe less working in a mid-terraced building in the middle of Southport, for example. It was hard to see how that sits or how it fitted in with the wider strategy unless it was because, from a personal lines perspective, it's always good to say we do have somebody in your area.

Now that was how I interpreted it, but it was never actually made clear what the strategy was, and having been involved in them, there were a few headaches in terms of almost asking the question, why did we bother buying this business? Again, one of the pitfalls of a merger and acquisition is the failure to offer proper integration and aftercare because it's a very unsettling period for those within the business that's been acquired other than the individuals who have agreed to sell it. They know exactly what they're doing. Sometimes they're taking a position within the new company. Sometimes they're just taking the money and going. There seems to be very little thought as to how do we integrate people, ethos, training, systems because essentially, what you're trying to do is… Certainly what I was trying to do was to create a culture. These things make that more difficult. With that comes a leakage of people, and you risk losing some good people, whereas if you just face these things head on and explain what the goal is, what the strategy is, you lessen that risk.

00:22:58] How much focus do you see Ardonagh placing on inorganic growth going forwards, particularly in retail SME, given the challenges?

GM [00:23:12]: I think certainly, we've already seen what that strategy looks like. It's certainly been massively scaled back. I think they'll always be interested in making the right acquisition, but again, going back to the point I made previously, it was too much in too short a period of time. I don't think it will put them off actually stepping away from that altogether because it's a good way to top up the GWP, but I don't think it should detract from the overall strategy of how do we actually grow the business? How do we get, getting back to basic broking principles of going out there and getting new business, what do our pipelines look like, what do our people look like, what is our reach, what is our service, what is our proposition? I think there'll still be players in that market, but I would like to think there'll be lessons learned from the too much too soon approach.

MH [00:23:12]: More of a cooling period.

00:24:19] If Ardonagh were to undertake acquisitions going forwards, which aligns with the strategy it has been following for a number of years, where would you expect the company to focus in the retail SME market? What would you target?

GM [00:24:43]: I think if they want to make the brand awareness, the names, they wanted to mean more in the market, then probably a more significant acquisition would be required. It seems they've made a lot of small acquisitions. I don't think they have improved the footprint necessarily. I don't think it's improved much other than the bottom line, certainly at the outset. I'd be looking for something a bit more substantial, but still in that space.

I was going to say it's difficult to put a size of business or an area of business because they're fairly well-covered geographically. In fact, they are very well-covered geographically. I think sometimes they can end up spreading themselves a little bit too thin because they've got a good footprint in the major cities in the UK. It would be difficult to pinpoint, but I think they'll stick to what they're good at in terms of essentially on the farming side and on the motor fleet side with a smattering of lines. I expect that strategy to remain the same.

MH [00:26:13]: When you say sizeable, how much should Ardonagh be spending, or how big a business are you talking about?

GM [00:26:23]: Again, you're not talking about buying a Direct Line, something like that, but something of a statement purchase. Like I say, what they've been trying to do is purchase a lot of family-run places that you would walk past them, you wouldn't know they were a name, you wouldn't know what they did. If I go back to, I don't know, 20-odd years ago and the likes of AXA Insurance, nobody in the UK really knew who AXA were other than they were essentially a French insurer. Then they started sponsoring the FA Cup and the name awareness, the brand awareness goes through the roof. Similarly, AIG did it in the early 2000s when they started sponsoring Manchester United. Again, brand awareness, name awareness goes through the roof.

I know that's a sponsorship and it's not an apples-for-apples comparison. It's something that makes people go, that's who they are because again, with the best will in the world, the current name that they've adopted doesn't really mean anything to anybody. It was very clever the way it was done and how they came up with the name, etc. I'm talking about Everywhen, but there's no real substance behind it yet other than, "Oh, sorry, was that the old Towergate business?" In terms of numbers, I don't know, it would be a simple answer, but something larger than a small family business.

00:28:06] Numerous fears have been raised about AI disintermediation, particularly in non-speciality lines involving UK SME and retail. How do you assess the AI disintermediation risk for brokers?

GM [00:28:30]: AI has its place because from a time perspective and a breadth of knowledge perspective, it's really good if it's used in the right way. The problem you've got in the personal line space is people still want that personal touch. It would be at odds with the mergers and acquisition strategy around personal touch, local presence, local knowledge, but it still does have a place. I think what the business should be doing, if I'm not already doing it, is to identify… The best way to start is to speak to your clients and say, "Look, this is what we've got, would it benefit your business? Can we come out? Can we demo? Can we give you an example of what it looks like," and maybe even siphon off a type of client or a type of business either by size or by sector that says, "Yes, we could benefit from this." Your average man and woman in the street that maybe has a little bit working knowledge through ChatGPT and the like still prefer to speak to a person.

That's what all the research that the market does is centred around that. Would you rather hear from me, the local person that you've been dealing with for the last 20 years? Would you rather hear some automated response that's going to cut down the interaction time and cut down the relationship element of it? The last time I checked, it's still a relationship business. These relationships, when you do your customer studies and all your surveys and feedback, that still comes out very, very high. It's finding the balance, I think would be my takeaway.

00:30:26] What percentage of Ardonagh's business could AI disrupt?

GM [00:30:47]: Again, that's probably a bit of a USD 64,000 question, but it's a high percentage it can be disrupted by it. I don't think that's any secret. Again, it feeds in maybe one or two examples you can give around it having such an adverse impact on the UK court system just now because individuals are now defending themselves in court proceedings because they're typing in AI. AI, because you are the user, AI is always giving the response, "Yes, of course, you have a valid claim." What they don't have is the ability to defend themselves to further question. It's been taken up. It's clogged up to the UK courts. The financial impact and the time impact on that example is significant.

Likewise, AI isn't always correct. I've seen numerous examples. Let's say you're looking for direct flights from Glasgow to Reykjavik. It says these are the flights. You say, "Yes, I don't think in the wintertime that Glasgow flight goes direct to Reykjavik," and then you get AI coming back to say, "Oh, yes, you are correct." In terms of the impact that AI has on you, you think, all right, so it's not infallible. It has the potential to massively disrupt it. We speak about it even from a cyber perspective, from phishing, from a scam, from an advice that looks proper and it's not, and that has the ability to really impact from a time, from a management, and from a financial perspective.

MH [00:32:40]: Could you estimate the hard percentages? Are we looking at 20%, 30%, 40% or 50%?

GM [00:32:49]: I think you're looking probably upwards of 40%.

MH [00:32:55]: How much of a threat is that to Ardonagh going forwards? What can the company do to mitigate this?

GM [00:32:59]: It's clearly a massive threat, but from a mitigation perspective, if you limit the circumstances in which you permit AI to be used and the interactions you have, then you limit the financial impact and you lower that percentage.

00:33:24] Ardonagh's revenue was reported at GBP 1.8bn in FY25. You estimated early GWP. What percentage of that do you think came from non-speciality UK retail and SME lines?

GM [00:33:44]: I would estimate around about 30-35%. Again, just on the proviso that 65% of the business is non-UK on personal lines stuff. Just a rough figure, I guess.

00:34:16] The market is widely reported to be in a softer cycle. What impact does that have on revenue outlook? How effective would you say Ardonagh is at managing different cycles?

GM [00:34:27]: I think that's where they struggled. I think they're not alone in that because when the market is hard, insurers, brokers, it's easier for them to navigate, but when it's a soft market, when it's a soft cycle, it's a client's market. That's where more emphasis needs to be placed on retaining existing business. That's where primarily they failed. Again, just my opinion, but the numbers back this up. Usually, you're looking for something in the mid-90s in terms of business you've managed to retain, but the last I looked, it was in the low 80s. The volatility there is huge. The margins there are huge. Primarily, that's because they lost a bit of the focus. The focus is supposed to be, "Yes, go and pursue new business, but don't forget your existing clients." I think that's what's happened.

As a result, clients have got options, and they've got options to go to multiple different insurers and get the same or better service and pay less in terms of however the fee structure is put together. What you really need to be prepared to do in this market is to take a hit on your fee. It's retain at all costs, retain the business, and then once that cycle changes, and it will change, then you can look at, okay, so how can we build up our income again, but what we've done primarily is the one thing that people lose sight of. We've looked after the client in the first instance, and I think there's sometimes the realisation that that's too late. You make a number of assumptions that this is what the client wants. This is what the client wants. Do you ever ask? I think that's one of the key that you should be asking, does this work for you? Does this feel like the service you should be getting? Is there anything else that we can do rather than just rinse and repeat?

00:36:47] How do you think the relationship works between Ardonagh and its clients? It sounds as if it's primarily driven by price, given what you mentioned. How sticky are potential clients to the broker, based on relationship vs the actual price, and how does that balance work?

GM [00:37:19]: Price will always be king, but the reason, again, I go back and say it's a relationship business. If you win a bit of business, you don't go and see that client throughout the course of the year, and you go and see them in renewal. The person that had that business before, you can bet your life, they see them, they've been in touch with them. A lot of it is the aftercare. A lot of it is that personal touch, that visibility that, again, you can only get when you're providing a genuine service. You've got to go and see people. It has been shown over time that people will either… Even though they can get things a little bit cheaper, if they're happy with the service, you're making it difficult for them to leave.

I think that service never gets a proper value because it's hard to put a monetary value on service and what it means to people because, post-COVID, everything is a bit tight financially. Where am I looking to make savings? That's when you look after your client the most. That's when you take a hit. If the relationship works the way it's supposed to work, through that visibility, I'm not saying you need to be friends with these people, but some people are friends with our clients. Some people are able to sit down and talk to them about something that's happened socially or something that's happened with the family. It's just a natural progression of that relationship, and that, while it can't be quantified, is massive.

I actually think Ardonagh are pretty good at that. Where they missed a trick, and this is what led to a lot of existing clients leaving, was that lack of visibility that, "I've had this client for 30 years, they'll never leave me, and lo and behold, they have." There's a lesson in there that you can never take it for granted no matter how good the relationship is. If you don't look after them, if you don't deliver on what you promise, then you run the risk of them finding someone else. That's been the way it's been for generations now. You shouldn't be surprised when it happens.

Again, to have a specific example of this, we lost a bit of business a couple of years ago, and we were discussing it as a senior leadership team. The rationale, the reason for the loss of business was that the client wasn't in when I went out, but the client was a hotel. They were definitely in. They were in when a rival broker went out to see them. They just didn't put the effort into it because they didn't think they could lose it. Everybody has a plan until they get a punch in the face. That's what's happened there. It's important to learn lessons from that, I think. That personal touch, that visibility and availability is something that should be put right to the top of the list of services that they can offer.

00:40:27] Regarding revenue, what's your assessment of Ardonagh's ability to expand margins by keeping underwriting in-house – for example, moving away from the relationship piece through MGA [managing general agent] internalisation such as Geo Underwriting?

GM [00:40:55]: I think the Ardonagh name, I think the brand, I think the reach and the flexibility that they've got will always stand in good stead. I think go back to 2017, the Ardonagh name didn't really mean anything. You fast forward 6-7 years, and they become a real player in the market. I think being a one-stop shop, being able to do that and to have that financial flexibility, that will always set them apart from a lot of the mid-size brokers. My impression was that they weren't wanting to operate in that space forever, and they would look for those steps to take to make that next step. I don't think they're happy with mid-table, if you like. I think they're trying to push further up the league table. The way that the business is set up, it's pretty lean. I'm sure we'll come on to talk about people and changes in proposition and service, particularly within the claims sphere, but they're set up to succeed. They just need the right people in the right roles to take them on that next step.

MH [00:42:09]: Realistically, how can the company do that? What role does the in-house underwriting have within that, and what are the other levers?

GM [00:42:26]: What that enables you to do is to have the decision-making process shortened considerably. Time is money and all that stuff. If you're able to have that underwriting ability, capability in-house, you really steal a march on similar-sized brokers that don't have. Likewise, with the claim service, having that ability in-house, if you utilise it properly, gives you a march on a lot of your competitors and rivals.

MH [00:43:05]: What is the core benefit? Is it about pricing, speed or accuracy?

GM [00:43:14]: Pricing primarily, and with service comes speed or with speed comes service. Those two are the main driver for it. Flexibility is the other one, to be able to use, to leverage the size of the organisation in a way that smaller brokers can't do, but essentially, it's going to be driven by price, and the more influence you can have in a market, the more influence you can have on price.

00:43:54] How successful do you think Ardonagh is at cross-selling across lines of business, particularly in SME retail clients?

GM [00:44:02]: I think they're pretty good at it because, again, my experience of it, the people that are in these sales roles are really good at selling. First and foremost, that's the job that they should be doing. Yes, of course, they need to make their commissions, etc, but they're good at selling. They're good at looking after the client and giving them all the bells and whistles. The flip side, we go back to the servicing of existing clients possibly getting put on the back burner because the focus is on the new, what else can we get and what can we sell them. I think the Ardonagh sales guys, the execs that are out there tasked with those numbers to get in the door, they see the full picture. They'll go and make a proper assessment of someone's business, what they have currently vs what they'll need. Now the trick is, and you're not allowed to do it anymore, selling somebody something that they don't need. To use one line, cyber is massive these days, but it doesn't have the take-up that it should have.

There are so many high-profile examples of blue-chip companies having real problems and air traffic control, Marks & Spencer, all these big companies that have had problems. You think that would be the time to sell cyber, to go and say to somebody, "Yes, you'll have noticed that it can happen to them, it can happen to you." However, the general approach seems to be, "Yes, I'll deal with it if it happens to me." There's an awareness there. There's an ability to link what's going on in the wider world to someone's actual business and make connections there. Again, you go back to the relationship piece. That helps because you don't sound like a cold salesperson. You sound with that empathy that you're able to impart, that knowledge of the people and the knowledge of the business and the knowledge of the market. This all helps when you're trying to cross-sell because it doesn't feel like you've just tried to find something in the last minute and blindside the client. I think as a business, they are good at that.

00:46:28] How do you assess Ardonagh's claims management process? Where is the company efficient vs inefficient compared to the wider market?

GM [00:46:40]: This is what I can speak to with some authority, I think. What they tried to do was great. What they delivered was a diluted version of that. They committed a change when I started. Part of the reason I took the role was I was attracted to how much autonomy I was going to have. I wanted to do two things essentially. I wanted to create a culture where people would be reluctant to leave because the amount of time that you spend recruiting and training, the numbers it takes, it costs you two people to replace one person in essence. To create that culture and also to deliver a good service, that's what we really do at the end of the day. Again, going back to how many businesses they bought and trying to integrate different systems, people that didn't know they were part of a wider team, people that really wanted to be part of a bigger team because they used to be working on their own, it leads to too much too soon, but we managed to achieve a very lean… We didn't lose many people.

I can't remember what it was going for here, but we didn't lose many people because people saw the vision, because people saw what we're trying to do. Ultimately, claims is a cost, claims is an expense. If the business isn't performing well, you look at ways to claw back some of the deficit. That's what's happened in claims, that they committed to a structure. They then reverted back to a previous structure that hadn't worked. They very recently gone through a raft of UK redundancies, which perhaps gives the market impression that they're going to outsource the claim service. I, for one, would fight to the day I die to say that having an in-house claim service capability, expertise is far better than allowing somebody else to manage that service for you. You represent that business. When you outsource that business, it's completely different, and you lose a little bit of control. Especially when you're trying to bed in a new brand and a new name, it gets lost in the shuffle a little bit there. Good people, good ideas, poor execution.

00:49:12] Would there be any upside from outsourcing claims from a cost perspective or through any other method? Could you quantify the difference between having an in-house claims system vs outsourcing it?

GM [00:49:29]: There are clear financial benefits to doing it, but in all my experience, I don't think it's ever worked the way it's supposed to work once. I guess it comes back to you get what you pay for, and what you get is a very analogue service in a digital world. You get people that, whether you're sending it overseas, you're taking away that personal touch because the person that dealt with a claim for Ardonagh doesn't deal with it the same way if they're working for some third-party administrator. It's more of a process, and what claims should always be is value-add. Don't get involved if you're not going to add any value, and also make sure that the client is fully up to speed, that they're happy and aware of what's going on. That doesn't happen in TPA. You're saving money but sacrificing service, I think, would be the equation I would come up with.

Even now, you're saving less money than you would have had. I was involved in an exercise looking at offshore. This predated Ardonagh, but we were looking at an exercise of offshoring firstly to Lithuania and then secondly into Bulgaria. The number per head, if you like, that you were looking at, you're thinking, you're not really saving that much money at all. Why are you bothering trying to integrate this somewhere else? Just face the problems head on. What is happening? What do we need to do to fix it? What's the timeframe? What's the cost? Actually, commit to doing it rather than just cutting them adrift, if you like, at a moment's notice. That would be the downside definitely.

00:51:25] How much money would be saved through outsourcing? Hypothetically, if you have a GBP 1,000 claim, what would the processing cost typically be in-house vs with an external provider? I appreciate it varies from claim to claim.

GM [00:51:45]: It's not so much the cost per claim. There'll be more of the business would pay X amount per X hundred claims, for example, and there will be a fixed fee. Even then that fixed fee would be a variable one dependent upon the size and complexity of the claim. Let's say, if it's an in-house claim, there's no other fee to be factored in. GBP 1,000 is GBP 1,000, whereas if it's a TPA, we have to pay for that service. That money is going to have to come from somewhere. That GBP 1,000 might become GBP 1,300, so you save money in other ways through volume, etc. Essentially, I have seen no evidence of an improved service. Those numbers I was talking about for Bulgaria and Lithuania, you might save 15% on your base cost. What the firm I was working for at the time ended up doing was bringing lots of it back in-house. That equals failure. It equals damages to the brand, it damages the relationship.

I'm not saying it can't work, but I'm just going to see little evidence of it working, especially as you're supposed to be replicating the service that you once were giving out internally. I think there should always be a place for claims. What we were able to do was show savings YoY, claims was run essentially cost-neutral. We came out very well in terms of surveying both internally and externally. I guess it was quite sad to see it go the way it went.

00:53:43] What impact do you feel M&A has had on Ardonagh's claims processing, particularly its ability to maintain consistency?

GM [00:53:59]: That's a tricky one because initially, the impact is obvious because what we saw initially was you were having… Say you bought a business that had five claims employees and they had a portfolio of work of, let's say, 1,000 claims. Everyone is dealing with a couple of hundred claims, and everybody else within Ardonagh's existing structure is dealing with 300 claims. Essentially, you're bringing in more resource, you're able to service more clients, you're able to give people a little bit of breathing space to add value. That's a clear benefit. The flip side is so many systems, each of their own system, and getting people on our system and integrating historic work into the new work as far as I'm concerned is still ongoing. I've been away for nearly one year. That's still a headache. You're probably bringing in some cases, the type of experience that you probably didn't have the budget to recruit. There's a clear benefit there.

I suppose the other side to that is, obviously, a lot of the claims people, anything from the MD or the owner downwards, don't really know what's going on. Sometimes it feels as if it's a bit of a hostile takeover. People are demotivated by coming in and working in a different way as part of a bigger organisation or a different management structure. I would say that my own experience having gone through that and being part of the M&A process and part of the integration process, that it was overwhelmingly positive in terms of people because it allowed us to properly service or at least have a chance to properly service the portfolio of claims that we had because we were chronically understaffed.

00:56:09] What's your outlook for Ardonagh's ability to automate claims processes, particularly with AI? What impact could that have on the company's profitability and margins?

GM [00:56:23]: I think the way that the claims process has been looked at and restructured and refined over the last couple of years, I suspect that that's what they're looking at. I think they've got the technology to do it. They've got the experience to do it. They've got the people to do it. I think going back to the point I made about claims being an expense. When the business isn't performing well, you look at what is costing you money, and claims will always cost you money, and you try and shave a little bit off here and there. I think that going down the automation route, I think that will address some of the leakage, if you like, but it also plays into the strategy that some of the major insurers are having anyway.

I think one of the major things for Ardonagh against automation was they always stuck to this mantra of, "We don't want to tell our clients to deal direct with the insurer because that means we are not involved in it." Again, the point I made previously, if you're not adding value, what is it you're doing? You're just there for being there. Insurer strategy is always deal direct because it cuts down time, it cuts down cost. I think maybe Ardonagh are going to fall more in line with their major partners with the likes of Aviva will be the major player for them in the motor fleet space. I suspect that they've probably been ground and worn down over the last two years.

00:58:11] What 2-3 key things do you think institutional investors should be monitoring regarding Ardonagh over the next 1-2 years?

GM [00:58:25]: I think their infrastructure is good. I think their people are good. I just think they probably still need… There's still a little bit of instability, a little too much dropping and changing and not sticking to a plan. I think they panic at the first sign of a negative result rather than putting more faith in the process. I think the geographical reach and the lines of business that they focus on, sometimes you can focus on too many lines, but I think they've got the mix just about right, albeit from a profit value perspective, if they could attract a lesser degree of motor business and a higher degree certainly of liability business. I think that would give the portfolio mix. It would be a lot healthier to do it that way, easier said than done, but that's why any M&As I'd be looking at in the future would be with a focus on liability business. Still a good business, still a lot to offer, but I think perhaps they lost sight of that without people, there is no business, and you perhaps need to look a little bit inward before casting the net far and wide.

MH [00:59:47]: Is there anything else that you would like to highlight regarding Ardonagh?

GM [00:59:53]: I don't think so. I can talk for hours and hours and hours, but even I've got my limits, I think, but I think we've covered everything I wanted to say certainly.

MH [01:00:02]: Thank you very much for your time, and goodbye.

GM [01:00:09]: Thank you very much.

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