Reinsurers targeting primary business will drive growth for Davies Group

As reinsurers seek to diversify, they are increasingly attracted to the primary insurance market and operations management. This is a trend that digital solutions provider Davies Group can benefit from following its acquisition of specialist insurance and professional services provider Ambant last year, its CEO told Intelligent Insurer.

“We continue to see reinsurers increasingly entering and playing in a more primary way in the insurance market in the UK and Ireland,” Dan Saulter, CEO of Davies Group, told Intelligent Insurer. “We have a lot of reinsurance clients who either come into the market through an MGA or through a Lloyd’s situation, taking quite an active role in the UK insurance market.

“Certainly we are seeing a big increase in reinsurance clients coming buying claims solutions and insurance services in the past year.”

After the acquisition of Ambant in September 2017, Davies has now an MGA (managing general agent) launch and host capability, allowing the company to swiftly get MGAs off the ground by providing the necessary services and offering assistance with operations and digital and compliance services.

“We are seeing a lot of reinsurance activity powering and providing paper for those MGAs which then turns into claims solutions opportunities for us,” Saulter said.

Davies Group has broadened its product offering in recent years through a flurry of acquisitions including Cynergie, Ambant and, most recently, R&Q’s insurance services businesses. Following the acquisition Davies Group has streamlined its business, creating three operating platforms across claims solutions, insurance services and customer solutions.

“Our calculation is that our large insurance clients, our MGAs, brokers or reinsurers want to outsource and want to buy operations, digital services from fewer, larger providers,” Saulter said.

“Our whole focus is on creating a breath of offering to the same end clients.”

“We are very focused on our insurance end market and we have around 300 insurance clients around the business and they are buying services from our claims solutions business, from our insurance services business and our customer solutions business,” he added.

Davies Group’s expansion has been fuelled by a £90 million investment from private equity firm HGGC, which invested in the business in January 2017.

At that time, Davies had built out its claims solutions focusing on desk, TPA (third-party administrator) claims handling for insurers, reinsurers, MGAs and brokers. But the firm had a plan to build out the brand beyond the claims business.

“The investors liked Davies’ strategy to expand the insurance services capability through a combination of organic growth and M&A and increase the investment in digital transformation to form the customer solutions business,” Saulter explained.