US specialty insurer Markel says brokers are core to its Australia strategy as the business prepares to commence operations with the opening next week of three offices in Melbourne, Sydney and Brisbane. 

As reported previously, the insurer aims to tap into growing demand for specialty commercial insurance, particularly in casualty and financial lines. 

Rory Morison, previously Axa XL Head of Long Tail Lines, will oversee the business as Australia MD and he reports to Markel Asia Pacific MD Christian Stobbs. 

“We are an intermediated business principally so the broking community is incredibly important to us at Markel,” Mr Stobbs told insuranceNEWS.com.au. 

“Whether we’re in in North America or Europe or Asia, the vast majority of the business we provide is through brokers. So we’ll be working with the brokers.” 

Markel already has “significant” relationships with all the multinational brokers operating here as well as some of the larger domestic brokerages.  

“But we will also need to work with other domestic brokers and that’s quite an exciting prospect for us because some of those domestic brokers don’t have the ability to access Markel elsewhere in the world,” Mr Stobbs said. 

Mr Stobbs, who is based in Singapore and led the months-long planning for the Australia launch, says Markel has been providing capacity to locally-based underwriting agencies from the London market. 

The decision to set up in Australia was also prompted in part by the goal to be closer to its customers here. 

“We've built up a lot of experience of the Australian market and if you sit here in Singapore seeing how the market is growing, having a team on the ground will give us better access to the growth of the specialty insurance market,” Mr Stobbs said. 

“The majority of what we’ll be doing we’ll be working with the brokers, but there will be selective underwriting agencies we will look to work with over time as well.” 

The SME market is one of the areas that Markel is focusing on and one in which underwriting agencies, and by extension broking partners, will be vital to the insurer. 

“In every country in the world, the largest number of companies are SMEs and to be relevant in any market that Markel is in, we have to find a way of providing our support to SME businesses,” Mr Stobbs said.

“I think where we see that most effectively being done in Australia is with the underwriting agencies. So we will look to support the underwriting agencies where it complements our strategy.” 

Industry research firm Axco estimates in a 2022 report that the Australian market generated $43 billion in non-life premiums in 2019, making it the 10th largest globally. 

For Markel it makes sense to set up camp here given the size of the market and the insurer is here for the long haul, says Mr Stobbs. 

“It’s a mature insurance market with a legal system we like. We’re here not to make a quick buck in the short term,” he said. 

“It is about the long-term success and we believe that we can make good returns and provide good support to the insurance market in Australia over the long run.” 

The investment Markel has made to open three offices at the same time demonstrates the insurer’s intent to grow its Australian presence, he says. 

“If you look at the approach that we're taking, it’s actually quite a significant enhanced market entry strategy,” Mr Stobbs said. 

“And therefore that should give us a little bit of a differentiator in the market… give us a bit more speed to provide the support, the incredible service that brokers and clients would want to see.”