Today we caught up with one of our senior specialist leaders: Russell Brown, who founded GB Underwriting, which rebranded to MX Commercial in July 2022.
Hi Russell, how are you? Thanks for taking the time to do this interview. Could you tell us how long you’ve been working on what is now MX Commercial, and what you’re responsible for?
Hi! I’m good thank you, no trouble at all.
I established GB Underwriting as a new business in 2003. Me and a colleague took over an existing MGA which was established in 1996; at this time it was one of the first MGA businesses in the London markets. The purchase came about when the company ran into trouble during the hard liability market of 2002.
My main responsibility in a nutshell is ensuring we’re profitable as underwriters. To break that down a bit: I manage the underwriting strategy, our relationships with capacity providers, and I’m heavily responsible for broker relationships.
My role of course touches other functions too. I have a big interest in the marketing function, and I’m compelled to get involved in our compliance and regulatory work as well as product development and policy wordings. I do a bit of everything really!
That sounds like quite the story, could you describe how you got to where you are now?
My parents were both self-employed. My father was a builder and my mother a hairdresser. Watching them inspired me to take an enterprise-related degree at university. I opted for a combined modular degree in Business, Industry, and Law. I finished my studies in 1999.
When I left university, however, I didn’t really have any grand plan on which sector I wanted to specialise in, I was curious about everything. Thanks to my parents I knew that working for someone else wasn’t the only option, in the long term. The problem was, when you leave university you don’t necessarily have experience or a trade. So, while I was figuring out what I wanted to do, I joined a temp agency in Colchester. This was to be my first taste of the insurance industry: my role was to take details and adjudicate on travel and household insurance claims.
The best part about this job was that prior to being unleashed on an unsuspecting customer you underwent a lengthy training process that lasted for weeks. They trained me properly on phone protocols and etiquette, policy wordings and most importantly how to study and interpret them.
Studying policy wordings – though I didn’t know it yet – would be so valuable throughout my career. I thoroughly believe I couldn’t have had a better start in insurance.
I very quickly realised that I enjoyed the social side of the insurance world and I stayed in this role for about 18 months. After that I spoke to a recruiter and started looking for other positions with in the insurance industry.
I finally landed my first role in a family-run MGA in its infancy. I was assigned as an assistant to another, more senior employee to aid in growing the commercial department.
During this time, following the September 11th terrorist attacks, Underwriting Commercial insurance became quite complicated. Insurers were unaware of their exposure to this extreme event, pulling out of certain classes and applying huge percentage increases elsewhere. This, combined with the 2001 collapse of Independent Insurance created a perfect storm. Within weeks of 9/11 previously acceptable risks were uninsurable and many businesses' ceased trading due to the unaffordability of premiums.
That sounds like it was a stressful time for many people, what happened while you were working?
Well, on our side of things, the lack of competition meant it was easier to write business - we had capacity and that was our biggest advantage.
My line-manager and I could see an opportunity as some UK MGA’s began to lose their capacity.
What do you mean?
Well, many MGA’s were unable to offer renewal terms due to binders being non-renewed or cancelled. Some, were closed down and others put up for sale. My colleague and I purchased one of those companies, with strings attached, for £1.00.
£1.00? That sounds ridiculous! How did it work and what did you purchase?
While it sounds extraordinary, it wasn’t that straight forward.
We effectively purchased: two employees (the sole directors) and a renewal book of business with no binder to renew it on. We also undertook to cede 100% of commission income for a multi-year period.
Form me the timing of this was incredibly fortunate. At 27 years old, other than some credit cards and student debt, I had zero financial responsibilities. Armed with some borrowed money, to plug the gap left by my salary, I handed in my notice and took the risk!
You were only 27 years old? That’s amazing! What happened next?
Well, other than the obvious financial obstacles my main problem here was my age and my lack of experience. On the other hand, I’d say my ignorance was one of my biggest strengths at this time – I had no idea how to run a business, but I was eager to try, and I figured it’s better to try and fail than to have never tried at all.
I struggled a bit during the early days with self-doubt, mainly due to my young age - I’d only been in the insurance industry for four years after all!
But I knew my policy wordings and how to communicate with brokers. My whole career so far was a steep incline, so I was ready in that sense too.
In the beginning, I would sometimes avoid meeting with brokers in person. I’d watched enough Doogie Howser M.D. to know that age can be a barrier to making a good first impression. I didn’t feel my appearance backed up how I wanted my company to come across. I learned to provide excellent service to our brokers and slowly introduced myself after I felt I’d proved myself.
That’s very honest Russell, we appreciate it! How did the business grow from there?
The hard market began to end in 2005, and this was when we took on our first new assistant. Shortly after that, we were able to source more and more capacity. We utilised new technology and launched an online trading platform – it was one of the first of its kind and was a brilliant success. It was transformational for the business as there were no other MGAs trading Excess of Loss in this way – we were innovative and this put us ahead of the competition.
We continued to grow our staff and relocated to a larger office, and then in 2011, we employed our first property underwriter.
It was around that time that James Gerry joined our company. James introduced a network of London market contacts, which was almost like the last piece of the puzzle
So, with James’ additional capacity the business continued to grow slowly, steadily, and organically. This is important in an underwriting business as while we absolutely could have grown a lot faster, we didn’t want to compromise our profitability and service.
And then Specialist Risk Group (SRG) entered the conversation?
Exactly that! By 2017 I was considering selling the business to reduce my work responsibilities. Partly because I’d been doing this for 15+ years and because I now had two small children – it’s not often you get the opportunity to engineer and mold your life to spend more time with your children, and I recognised that.
And what made you choose SRG as a potential buyer?
Well, SRG was different from a lot of other potential buyers we’d spoken to. In the meetings with them, they just seemed like a big GB.
And here we are! Rebranded and looking towards the future. James and I retain a significant financial interest, so I’ll continue to be involved in the business.
That’s quite the journey you’ve been on! With looking to the future in mind, what are you most excited about when it comes to MX Commercial and by extension Specialist Risk Group?
I’m excited about the opportunities that it will bring to our brokers. SRG owns an impressive stable of underwriting businesses. Bringing them all together under one brand and hopefully under one TOBA will provide our brokers easier access to specialist products – we have the specialism, so it’s all about ease of access for me.
What are your hopes for our industry?
I hope the industry recognises the enabler that technology is for our products. But I also hope it recognises technologies’ limited ability to assist in certain areas. Insurance is a complicated business and while technology can streamline the buying process, it’s not a substitute for experienced underwriters or brokers.
And Russell, just for fun: what’s your go-to karaoke song?
Livin’ on a Prayer – Bon Jovi!
