Polo maps out future as independent turnkey agency as Lloyd’s build-out accelerates

Following legacy specialist Marco’s acquisition of Capita Insurance Services and Capita Managing Agency and the swift rebrand to Polo just over four months ago, the firm has wasted no time in developing an active pipeline and is in the advanced stages of bringing several businesses into the Lloyd’s market.

Simon Minshall and Simon Sykes – Polo Works

Speaking to The Insurer, Marco CEO and founder Simon Minshall and Polo CEO Simon Sykes discussed how the change in ownership has breathed new life into the old Capita business.

Sykes – who has led the Capita insurance operation since late 2019 – explained that “before the acquisition by Oaktree Capital-backed Marco completed in May, the Lloyd’s managing agency and outsourced services unit were managed as standalone businesses as Capita wanted the option of selling the businesses separately”.

“Now, with the acquisition by Marco, for the first time ever we have been allowed – actually encouraged – to bring the two fully together – and we’ve now fused these businesses,” he continued. “We offer this wide range of capability in the market – which I don’t think has been available before.”

The acquisition of Polo saw around 300 staff based in Cheltenham and London transfer to Marco.

Polo Commercial Insurance Services (PCIS), the outsourced services arm, provides a host of solutions – including underwriting support, management accounting, claims management, compliance and regulatory and workflow management – to MGAs, (re)insurance brokers and London market carriers including prospective and existing Lloyd’s syndicates.

Polo Managing Agency is one of a very small handful permitted by the Corporation of Lloyd’s to provide third-party management services to businesses looking to enter the market, either in the form of a syndicate or a syndicate in a box (SIAB).

Sykes explained that Polo is able to uniquely offer end-to-end solutions for new entrants to the market – whether that be an MGA, SIAB or syndicate.

“It’s a very differentiated offering,” Sykes said.

Through the plug-and-play approach Polo offers to start-ups, “we are able to provide tailored services and the required licences to launch new insurance ventures”, Sykes said.

“We offer a menu of services UK-based clients can pick from,” he said. “We’re never going to impose a fixed model, our clients can take what they want from us and get the operating model that works for them.”


Rivalling Asta

Davies Group-owned Asta – which currently manages 10 Lloyd’s syndicates, four SIABs, one special purpose arrangement, four MGAs and £1.5bn+ of capacity – is currently the market-leading third-party managing agency at Lloyd’s.

While other agencies – such as Apollo – provide similar ‘turnkey’ services they do not do so as a core business offering.

Sykes said that while he admires Asta, Polo has a number of “big differentiators” which give a competitive edge that will be harnessed to position Polo as the go-to provider of Lloyd’s managing agency services to new entrants.

“We are unburdened by legacy systems and processes. Under our new ownership, we are investing to create a digital managing agency which will provide our clients with a lower operating cost. Combined with PCIS’ capabilities, we offer our clients a superior operating model within which they can ‘dial up and down’ resources required, at a low cost of operations, and which benefit from high operational resilience by being based in the UK.”

Polo, whilst part of the Marco Group, is and will remain a distinct and separate business. “We have the benefits of being part of a financially strong group which offers a shared IT hosting backbone while allowing us to remain a nimble and entrepreneurial operator able to meet our clients’ needs, flexibly and efficiently.”

Sykes’ comments were echoed by Minshall – who launched run-off specialist Marco in 2020 with €500mn of committed capital. He explained that Polo was in talks with a number of established Lloyd’s vehicles that were interested in transferring over to its platform.

“There’s a lot of interest in moving to us because of the fact that we’re independent,” the former Darag and Endurance CFO told this publication.

Minshall said that Polo’s new pricing methodology, introduced by Marco, is a major differentiator for a Lloyd’s managing agency as it is built around clearly defined KPI milestones as opposed to profit commissions – and this is also driving inbound enquiries from established Lloyd’s players.

“It’s really resonating with clients,” he said. “They’re far more relaxed about rewarding the business for (over)delivering on contracted for services than extracting a share of profit in good markets (but not suffering when profits turn down) earned on risk capital.”

Importance of innovation

Another key differentiator for the Polo business in attracting both established and ‘new model’ clients seeking market entry is its focus on innovation.

“We’re positioning ourselves to be a force for innovation in the marketplace,” Sykes said.

“When we talk to potential SIABs and MGAs we’re focused on bringing new ideas and opportunities to the market rather than just recycling an old underwriter,” he continued.

Minshall said that during a hard market cycle turning an underwriting profit can be relatively easy, yet many start-ups have fallen victim to ignoring the importance of innovation in their business models.

“In the current market it would be easy for a copy-cat syndicate to set up shop at Lloyd’s and just underwrite the same lines of business as every other Lloyd’s syndicate does,” he said.

“There’s a well-trodden pathway of failures like this because when the market turns soft, or if they fail to gain traction, they just implode,” he continued.

“Entrants with an innovative focus are valuable to the market overall because everybody’s not just fighting over the same piece of pie, while it allows Polo to position itself as the go-to place for new things.”