The Holborn ethos: based on trust

12-10-2020

The Holborn ethos: based on trust

Adam Manus, president and chief brokerage officer at Holborn

There are many things that set Holborn apart—and its centenary, which it is celebrating this year, is the least of them. The broker has long stood apart from its peers. It has been fiercely protective of its independence—but also guarded about its financials and some of the regular metrics which might be used to compare it to other brokers.

In an unusual move, earlier this year it did reveal its annual revenues: around $45 million, a figure that makes it the 10th biggest broker in the US. But that accolade is misleading too—size and growth are not a driver for the employee-owned company. Instead, it is a simple and deep commitment to putting its clients first. Everything else will follow.

Adam Manus, Holborn’s president and chief broking officer, stresses that the ownership structure of the company is the foundation of everything else.

“That is the starting point for our difference: we are 100 percent employee-owned, we have no external debt or other shareholders; our employee stock ownership programme means our staff share the success of the company in a very egalitarian way.”

This means, Manus says, that the company has just two stakeholders: its employees and its clients. This means employees work together for the collective good, and that the company has to be extremely focused on customer service.

“If we understand client issues, that means we can also solve them in a timely way; we aim to provide our clients with solutions and advantages,” he explains.

“We are able to take a very long-term view for our clients with a focus on relationships. It means that clients want to do business with us, and employees want to come and work for us. When our clients succeed, we succeed, and our staff succeed.

“That is the nature of our relationship-based business model. People talk about the importance of relationships with clients but that is often lip service. A true relationship is something you grow and nurture over time.

“That is the business reality for us—the way we have carved a niche and how we compete. We are playing a very different game from our competitors.”

Niche is a good word for Holborn. The company is unusual in its tight focus: the majority of what it does is treaty reinsurance brokering. It has no diversification; no other income streams to fall back on.

“We have no other distractions; we have to be good at what we do. That means that if people want to trade with us, it is not because they have to, it is because they want to,” says Manus.

Manus argues that the challenges the industry has faced in 2020 have validated the strength of many aspects of Holborn’s business model and the fact that it has always prioritised long-term relationships over short-term profits and wins.

“We have plenty of opportunities to squeeze our profitability, but we always take a long-term view on things. This business can be volatile and the last six months has proved that.

“When the fog of war is thickest, people are searching for reliability and consistency and who can walk the walk,” he says.

“In some companies, we are starting to see cracks appearing. But we do not have to raise money and take on debt, like some competitors, and we remain under no pressure to sell, to reduce salaries or to make redundancies.

“In some ways it is quite neat that in our centenary year, although we have not been able to celebrate quite as much as we would have liked to, the year’s challenges have helped reinforce and vindicate our business model.

“We have been on a hiring spree and we are looking forward to building out for a bright future.”

“It is so important to build the next generation of talent within the business.”Talent for the future
Central to being able to deliver on its relationship-drive business model is the quality of its people. Manus says the company has been hiring steadily for a couple of years and has continued to increase this process—even through the COVID-19 crisis.

“We have tended to run a lean ship over the years, but we have invested heavily in a new generation in recent years.”

He adds that the company is increasingly hiring people with different skillsets. Value-added services generated by its analytics services are coming increasingly to the fore.

“For us it is so important to build the next generation of talent within the business. We are celebrating 100 years, but we want to sow the seeds for the future. We want good people here willing to challenge the norms and drive the business in the future,” he says.

This investment in the future comes at a time of turbulent market conditions in the industry. On top of the losses and economic disruption caused by COVID-19, the US is grappling with several unusual cat events, including severe windstorms of a specific type known as a derecho, which hit the Midwest in August.

Manus says events such as this illustrate the flaws in some of the models the industry uses and the importance in ensuring the right talent is in place with the right tools to help clients.

“We have continued to grow our proprietary suite of modelling tools to ensure we can offer a more accurate and appropriate understanding of risk with our clients. But we have the good people and the right culture to do that.”

With rates hardening across many lines of business and capacity scarce in some areas, this approach is needed. Business is becoming harder and more expensive to place. Manus says he expects that the overall ceded margin will increase in the year-end renewal, but by different degrees based on the specifics of various portfolios.

He adds that, as the market finds its balance, he expects a lot of conversations on the topic of communicable diseases and how they are treated.

“This will be a different conversation from client to client, depending on the risks presented by individual portfolios and companies,” he says.

“But that is the beauty of the very strong relationships we have with our clients—we can have these tough conversations and they know we will always be doing the best we can for them.

“They are facing a lot of uncertainty, but they know we have their back. They trust us implicitly.

“And the fact is they know we have a solid business—we have the ability to add value to clients on multiple levels,” he concludes.

Adam Manus is the president and chief brokerage officer of Holborn. He can be contacted at: <email>

The Holborn, Centenary, Insurance, Reinsurance, Adam Manus, North America

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