Speaking with The Insurer TV as part of its Close Quarter series, McMellin said the wholesale business is focused on growing by adding to its product offering where there is demand.
“At the moment we’re exploring the international casualty field, we’re looking into kidnap and ransom and we’re exploring new territories – whether that be Australia, or more around the operations within Asia,” he said.
McMellin also mentioned renewables as an example of where Markel’s wholesale business has developed some of the product set and said it expects to do more in this space.
“We have been investing heavily in an in-house team who have expertise both onshore and offshore in the renewable space, taking talented individuals, both from the insurance industry, but also, as importantly, from the renewable industry, bringing new skill sets to form a market-leading team,” he added.
The group’s wholesale business is concentrated into six product areas: professional and financial risks; marine; energy; cyber; trade credit, political risk and surety; and equine and livestock.
While predominantly based in London, it has operations in Asia, as well as teams in Europe and the US.
“Our ultimate vision is to be that leading specialty insurer in our chosen fields and markets and thinking about how we go to market,” he said.
McMellin explained that Markel’s shorter-term vision encompasses reaching $10bn in premium by 2025 and generating $1bn of underwriting profit.
“It’s that $1bn of underwriting profit which is key frankly, because if we’re not providing profit to our shareholders, then the rest of it is not really worth it. Within Markel and within wholesale, our part of that short term is to be a $2bn player by 2025, producing a better than, or equal, combined ratio of 90 percent,” McMellin added.
Speaking of the challenges facing the industry, McMellin pointed to concerns around remaining relevant amid the changing risk landscape for clients and servicing them in the most optimal manner.
“Our client base is changing and it’s a fast-changing world that we see ourselves in. Much more of the risks are intangible, yet the insurance industry is still very much geared up towards the tangible risks. So we need to think about how we serve those clients as they go through their changes as we see new industries start up,” he said.
“But even within some of our existing products, it’s thinking about how we perhaps package some of those products together to make them more relevant,” McMellin continued.
In addition to remaining relevant, McMellin also noted that the industry must address the challenges around diversity and inclusion, and operational efficiency.
Lloyd’s: “Can-do attitude”
Elsewhere in the interview, McMellin reflects on his career to date and how it was shaped by working in the Lloyd’s market at the beginning of his journey.
“There was a huge amount of cachet around the Lloyd’s trading environment. And I can remember my first trip into Lloyd’s and seeing all those brokers milling around the syndicate boxes, walking purposefully from box to box – and there’s a can-do attitude and a competitive environment. And you really felt you were at the heart of a global market within that Lloyd’s environment,” he said.
But regardless of the nature of the challenges McMellin has encountered in his career, he noted the way the industry operates has fundamentally not changed.
“Insurance is still very much a people-led business, and when I think about some of those challenges, whether it be growing teams internationally, whether it’s being part of M&A either as an acquirer or as an acquiree and integration with that. When I think about how I’ve had to remediate accounts as everyone has to do from time to time, and to think about strengthening reserves within books of business – it all points down to thinking about behaviour and culture and how people react to that,” he said.
In addition to these topics, during the interview McMellin discusses the following:
- His pathway into the insurance industry
- The biggest challenges during his time at Markel
- Plans and growth strategies for the wholesale business
- Vision for Markel’s wholesale business
- Challenges for the industry