Markel outlines Canadian and international growth strategy

Markel is looking to approximately double the size of its business internationally and in Canada over the next five years, senior executives tell Canadian Underwriter in an interview.

Markel International is a US$2.5 billion business that is looking to grow to US$5 billion by 2030, while Markel Canada is looking to grow from more than $200 million to just under $500 million, say Markel International president Andrew McMellin, and Markel Canada president and managing director Dave Crozier.

“We’ve actually been growing at a really good pace over the last five or six years,” McMellin says. “So, back in 2019, we were about a billion dollars [internationally]. We finished out last year about two-and-a-half billion dollars.

“More importantly, we’ve improved the combined ratio from about 99% in 2019 to a sub-80 combined ratio at the end of last year.”

Despite the growth, Markel’s market share in its main geographies is quite small, McMellin says. “In London, we’ve got about 2% market share; it’d be nice to be able to grow that profitably to 4%.

“But outside of London, all our businesses have less than 1%,” he says. “So, we think there’s a huge amount of headroom.”

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The specialty insurer is also targeting a combined ratio of 90% or better and looking to balance its business. Presently, 60% of its book is based out of London markets, and 40% in non-London markets; Markel is looking to balance that to 50/50.

Five pillars

So, how does the insurer plan to double its business? Through five strategic pillars, McMellin says.

The first pillar revolves around attracting and retaining talent. “A lot of it is around how…we continue to attract, retain and develop the talents that support the business,” McMellin says.

Adds Crozier: “Both attraction and retention, they really hinge on…feeling empowered, feeling valued, feeling heard and seen, and connecting with what the company is trying to do. Because if you can do that, then everyone wants to continue to be a piece of growing something special.”

The remaining four pillars revolve around:

• Empowering company leadership.
• Improving ease of training. This includes through speed of service, but also by using innovation such as artificial intelligence.
• Improving operational excellence by investing in data, such as underwriting workbench systems, portfolio management and data analytics. “How do we make ourselves more productive,” McMellin asks, “so as we grow the top line to the future, we’re not having to grow the expense line in the same fashion?”
• Recognizing there is a lot of product and distribution expertise across the entire Markel group and taking more products to market by working together.

“It might be thinking about how we have developed a best-in-class environmental product here in Canada and saying, ‘There are other territories that we have in Markel International.’ We can then take that product expertise and launch it into those markets,” McMellin says as an example. “It might be how we take some of the product expertise we have in London and say, ‘Actually, that fits here in Canada. How do we launch that?’ And by doing that we are bringing more products into the market.

“We believe with those strategies, and given where our market share is, there’s ample opportunity that we can grow the business and grow the business profitably over the next five years.”

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.