Reinsurer Miller finds new owner in GIC, and a refreshed strategy

Singapore

IN THE fresh hands of new owners - Singapore's GIC and international private equity firm Cinven - specia-list insurance and reinsurance broker Miller is now targeting growth from expanding into private wealth.

It expects a 9 per cent year-on-year revenue growth for the next four or five years, said Nigel Cross, who leads Miller's Singapore office. As it is, Miller has already acquired specialists to form a team in the UK to serve high-net-worth individuals. These individuals often desire cover for high-value homes, antiques, fine art and other items that are not normally covered by standard insurance.

Mr Cross said that growth across all business functions can also come from acquisitions - a strategy that it has been less acquainted with until now.

He said: "Miller has been around an awful long time, but really not made that many acquisitions and is still a certain size. And while we have always been consistently profitable and built a very strong brand and reputation, we recognise that scale is going to be increasingly important and relevant."

Headquartered in London, with offices in Brussels, Geneva, Ipswich and Paris, Miller is a company with a history of more than 115 years that specialises in selling reinsurance.

Reinsurance is a way for insurance companies to transfer some of the financial risk they assume when issuing insurance policies. There are two primary types of reinsurance arrangements: facultative reinsurance and treaty reinsurance.

While facultative reinsurance is designed to cover single risks or defined packages of risks, treaty reinsurance covers a ceding company's entire book of business, such as a primary insurer's homeowners' insurance book.

Noting that insurance and reinsurance is a "hardening market", Mr Cross said: "The terms and conditions in the global marketplace are tightening. Premiums in many sectors are starting to increase after years of reductions, and other terms and conditions are becoming more onerous for clients."

Miller is also looking at rebuilding its treaty reinsurance business, a market which it exited when the company was folded into Willis Towers Watson.

Miller plans to open a new office in Bermuda by the second quarter of 2021, which will focus on treaty reinsurance. "We'll be looking to build out that treaty reinsurance capability with investment in people and possibly acquisitions in the near future, and that will most certainly involve Asia," Mr Cross said.

Miller will be looking to use better technology to improve clients' experiences as well. The specialist insurance business has traditionally been behind other sectors when it comes to tapping technology, Mr Cross said.

"There will be quite a lot of change management involved for the marketplace we are in. It's not just the reliance on Miller making the investment, it also requires other parts of our sectors to do likewise," he said.

Financial details of the acquisition by GIC and Cinven were not disclosed. Mr Cross would only say that it was a 50:50 investment.

Speaking to The Business Times a week after the acquisition was finalised, Mr Cross said the new ownership structure would allow more room for it to hit its targets.

"Our business is still a 'people business'... If you're a client and you're talking to individuals who have a share in the business, I think the feeling is that you're talking to someone who really has a stake in the business and it's not just an employee."

Among other things, the company is looking at "significantly increasing" employees' stake in its business.

Prior to the deal, Miller was owned by global advisory and broking firm Willis Towers Watson, which had an 85 per cent stake, as well as senior partners. This prior ownership model worked "to some degree", Mr Cross said. "But I think as the relationship developed, it was clear that our future plans and strategy were maybe not aligned," he added.

The company undertook a review in 2020, which led to GIC and Cinven coming on board - the two entities announced in November last year that they had agreed to buy the business.