Long-serving senior Willis Towers Watson (WTW) executive Philip Smaje has resigned to co-lead BGC’s ambitious new aerospace broker start-up with his former colleague Marcel Chad.
Smaje will become CEO of BGC Insurance’s yet-to-be-named new global aerospace intermediary once his notice period has been served from the global broker. News of his resignation from WTW began to emerge late last week and was confirmed officially this morning.
Smaje will rejoin his former Willis colleague and fellow aviation expert Marcel Chad who announced BGC Insurance’s plans last month to create a serious aerospace broking rival to Marsh, Willis, Gallagher and Aon.
The duo will co-lead the business – which is expected to be fully operational in 2020 – with Chad as President.
Smaje has spent over thirty years at Willis with the vast majority of his career spent in the aviation markets, according to his LinkedIn profile.
But in 2015, he was promoted to the role of chief broking officer for Willis GB before becoming head of global broking in Feb 2017.
Despite his broader responsibilities in recent years, Smaje remains well known in London’s aviation insurance sector and has also continued to be closely associated with a number of key WTW airline accounts such as United Airlines and IAG, the operator of BA and Iberia.
Chad was most recently a partner at JLT Aerospace, having joined the broking house in the summer of last year to take on the role of partner in its aerospace division. He became a free agent following the £190mn sale of the JLT Aerospace business to Gallagher which took place under a TUPE process in the UK. Prior to JLT, Chad was at Marsh as CEO of its aviation practice in the UK and before that Willis where he overlapped with Smaje.
BGC Insurance – which owns London market brokers Ed and Besso – is led by former Willis deputy CEO Steve Hearn.
Last month, Hearn told a London conference that the aviation insurance broking market was “ripe for disruption”.
Hearn’s Ed colleague and head of M&A/strategy Andrew Wallin also elaborated on BGC Insurance’s plans following the Chad launch announcement.
“The current market is stacked against aviation clients, with three brokers dominating this line of business because of their scale,” Wallin explained.
“For a significant independent player like us with a client-focused approach, vision and technical prowess, the gap in the market offers huge disruptive potential,” he added.
“Our proposition will be compelling: a truly bespoke aviation offering from a concentration of the industry’s top talent and tailored to clients, as opposed to the one-size fits all offered by many of our competitors.”
In contrast to the recent lack of underwriting profits, the largest aerospace brokers who dominate the global market are thought to be highly profitable with trading margins in excess of 30 percent.
Marsh is widely thought to be the industry’s largest aerospace broker with annual revenues in the region of $150mn. In total, the big four are understood to have around 80 percent of the circa $500mn global aerospace broker market. JLT Aerospace’s annual revenues were recently revealed to be in the region of $85mn as part of its sale to Gallagher.
Commenting on Smaje’s appointment, Chad said: “Philip and I worked together in our early careers and share common values and philosophies while offering diversity in our competencies, expertise and relationships. I very much look forward to working with him again in this exciting new venture.”
The Insurer comment:
Challenging the hegemony of the big global brokers is always an ambitious and tough ask. But, on paper at least, BGC Insurance’s Steve Hearn is right - the aerospace insurance markets do appear ripe for disruption.
After all, the ultimate clients are not rolling in profits; there is a reason why Warren Buffett won’t invest in airlines. And nor are aviation underwriters making profits.
But in contrast, the dominant aerospace brokers – Marsh, Aon, Willis and now Gallagher – are all thought to enjoy substantial margins. Add in the constant march of technology and surely this should suggest there is room for a disruptor?
In that context, the hiring of Chad and now Smaje is a major statement of intent from BGC Insurance and the expectation must be for a conveyor belt of talent to follow these announcements ahead of full 2020 operations.
But they will still have a tough fight on their hands and there will also be fresh competition from fellow start-up, McGill & Partners. That’s to be expected: speak to any pilot and they will say that taking-off is one of the toughest parts of the job. It will be a while before the auto-pilot can be safely switched on…