Why Service is the Secret to Tripling Growth in Insurance | Neil Galjaard, Markel UK

by Juan de Castro COO, Cytora

In this episode of Making Risk Flow, Juan de Castro speaks with Neil Galjaard, Divisional Managing Director of Markel UK, a global specialty insurance provider. Neil has over 30 years of experience in the insurance industry and has held leadership roles at companies like Lloyds, Virgin Money, and Towergate Insurance. Neil joined Markel in 2016 to lead the UK retail business across insurance, tax, and legal capabilities, whilst working closely with brokers, accountants, and lawyers.During the course of their conversation, Neil shares his insights on Markel’s ethos for delivering sustainable business solutions and the key driver of success in the insurance industry: great service. Neil also emphasises the importance of being available and knowledgeable for brokers and clients, how efficiency, technology, and data play a part in maximising underwriters' expertise, and what makes Markel a 'forever business'.

Listen to the full episode here

Juan de Castro: Hello, my name is Juan de Castro and you're listening to Making Risk Flow. Every episode, I sit down with my industry-leading guests to demystify digital risk flows, share practical knowledge, and help you use them to unlock scalability in commercial insurance. So, welcome everybody to another episode of Making Risk Flow. Today, my guest is Neil Galjaard, Managing Director at Markel UK. Neil, it's fantastic that we’ve finally found the time to do this recording together. I'm really pleased that you've been able to join me.

Neil Galjaard: Thank you, I'm looking forward to it.

Juan de Castro: Let's start with an overview of your role at Markel in the UK and a bit of your background to set the scene.

Neil Galjaard: Yeah, sure. I lead Markel's UK business, so that's everything in the UK apart from the London market, and people will know that as an insurance business, but it's also a law firm, it's also a tax business. I've been at Markel now for seven years. If you look back at my previous history, I had roles at a large broker, an MGA business, a bank insurer, a direct retail insurer, also a large live pensions investment business, and let's not talk about gas turbine engines or conveyor belts, because I've worked in those as well.

Juan de Castro: You've done a bit of everything. You said you've been at Markel for seven years now, and it's quite outstanding how the business has grown, not just grown top line, but also delivered fantastic results. The broader group has done the same, but you specifically in the UK have driven a fantastic result. How would you define your competitive edge? How do you differentiate from competitors in the UK market?

Neil Galjaard: We've grown a lot. So we're about three times the size that we were seven years ago when I first joined. And there's a fundamental point, I think, which is, look, we try to do things properly. We try to build really solid foundations, things for the long term. It's very much about delivering sustainable business solutions. And we're really a people-powered business. So as a specialist insurer, we focus on that space because, one, I believe pricing is more rational in that space, and I think people value your expertise more in those markets. So, we put a lot of effort into insuring our experts, our people, have the knowledge in those areas in which we trade, and we try to equip those people to be able to do their job well. So we're offering quality products, we're offering quality service. Just evidence that in terms of getting the number one commercial lines insurer in a recent survey, so really pleased about that.

Juan de Castro: Congratulations on that, Neil.

Neil Galjaard: No, thank you. But we work really hard to try and deliver quality of service, quality of products, but in specialist areas, and really making sure that the power of our people comes through in what we deliver for our brokers and their clients.

Juan de Castro: And that is a point that I would like to touch on potentially later in the episode, which is how do you keep that culture of being a specialist provider as you keep on growing, right? Which is always tricky, but let's get to that a bit later. Every time I talk to you, you always bring up service. You are really passionate about delivering great service to brokers, great service to end customers. Let's start with the broker service. How do you define great service and how do you manage to achieve all those awards?

Neil Galjaard: Yeah, it's really heartening, because a lot of people focus on the outcomes, right? A lot of people focus on numbers. They talk about growth or they talk about profit, but they're the outcome measures, they're not what wins you business. What wins you business and what wins you the retention and the establishment of relationships is the way you deliver for your broker partners and for their clients. And so service, I think, is the key driving factor of how you become successful. And I think in our market, that is probably even more pronounced because of the specialist nature. So it's not just about being quick. It's about having knowledge. It's about having expertise. But it is about being available. It's about being available to engage with brokers around particular risks, either new business or renewals. Because some of the things we underwrite, if you take some of our care clients, they're complex. So understanding and helping and guiding some of our clients or brokers through those situations is really important. Providing support to brokers so they can demonstrate their service to clients. So, if I think about the care sector, we have our own care practitioners. And those are people that work for us, they only work for us in the insurance sector, they also sometimes work for the Care Quality Commission. So you can see the linkage here. And that's really important in helping us understand risk. But it's also really important for a broker to then be able to deliver that as a service to their clients from Markel. So if you have a care client that buys the Markel Care Policy, you'll get some free time from our Markel Care Practitioners to work in your business to improve your care business. Clearly, that improves the risk for us. But for a broker, that's a great service to deliver to your client through Markel. Claims are a huge part of what we do as part of service. And we get world-class NPS scores. I'm sure we'll come back to that when we talk about how we measure service. But we get world-class NPS scores in terms of the way we deliver claims. I'm really proud to say when COVID happened, our first interim payment on COVID BI claims was in April 2020. We went all the way through that. We paid our COVID claims. That was really important. None of us thought we'd insure COVID, but we paid it. And I think that point of when it really matters at the point of claim, that comes through in all the research and feedback we get from brokers, but also their clients about how we behave at that point. We often talk about picking up a phone. It's important we pick up the phone, but it's important when the person answers the phone that they've got the knowledge and the experience to talk to you about what your query is, not just pick up the phone. And so the quality of the people, hopefully, shines through in what we deliver for our brokers, standing by your promises at the point of claim, but also delivering services that can help the broker deliver a better service to their client.

Juan de Castro: And to your point, so how do you measure service? And what KPIs do you use to see if are you on track to deliver the quality of the service you want to deliver?

Neil Galjaard: Yeah, so the best measure we have is the feedback we get from our broker partners. And it's not just brokers. We deliver via other channels like accountants and lawyers. But through our distribution partners and through our end clients. We survey them on a transactional basis throughout the year. So every quarter we then sit down. In fact, yesterday it was, the senior team, we sat down to review the last quarter's NPS results. And the brokers tell us what they like. If you’re unfamiliar with NPS, it's quite a harsh system. You have to score a 9 or 10 to get a promoter. And so we look through what they tell us about what we're good at, what we're not so good at. We look at all the promoter comments. We look at the detractor comments. The detractors, we phone them all back if we can get hold of them to talk to them about what they said so we can try and close the loop and improve on that. And we measure that on a quarterly basis in terms of a range of aspects about the quality of the product, the service we deliver, the type of product, the risk appetite. What they tell us is they rate us really highly on things like, our claims service, the quality of our products, our professionalism, our expertise. Interestingly, what they rate us less highly on is the breadth of our product range and the breadth of our appetite. So I look at that as a real positive-negative, if that makes sense, which is they'd like to do more with us. And that's a challenge for us because when you're a specialist, it's important that you have the right expertise in the right areas so that you stay in the bit that is sustainable, that really helps the client in the areas where we're experts. And clearly, the brokers want us to do more and more and more and more. So we're trying to do that. So we're working with brokers on where we can extend, tangential to things we do now and in new markets. But that's how we measure our service. We have ongoing surveys all the way throughout the year with distribution partners and the end clients, about how we deliver through the cycle, new business renewals.

Juan de Castro: And that is always a challenge, right? The breadth of appetite, especially if you want to be a specialist insurer, right? Because the moment you start broadening too much, you start not being a specialist insurer anymore, right?

Neil Galjaard: We take it in good spirit, though. We take it as a challenge, which says, how can we work with our distribution partners more? How can we look broader across their portfolio? How can we balance across that portfolio rather than looking at purists in isolation? That portfolio view is really important. So we're not a yes or no. We're trying to work with partners to try and understand risk. But I think an important part for everyone to understand is that what we're all trying to deliver is sustainability in markets and sustainability in pricing. You know, we've seen some quite erratic years where people were in a market, out of the market, in a market, out of the market, and what we try and do is try and make sure we're in the market for the long term. And so it's really important for us when we're selecting risk that we can deliver a balanced portfolio that can deliver the returns that we need as a business.

Juan de Castro: And then some of the points you made about what brokers appreciate from your service, things like responding fast, providing expertise. Obviously, all of those require your underwriting teams and all your internal teams to be available. And since we started working together, you always said, I'm looking at driving efficiency internally, but not for the sake of efficiency, but with a clear goal of how we free up our underwriters to be available. So I think this is how you ultimately drive efficiency so your underwriters are available and then can spend more time providing that expertise to brokers. Is that how you look at it?

Neil Galjaard: Yeah, I think when people talk about efficiency, a lot of the time they're talking about reducing costs. And that's not the way I think of efficiency. So the way I think of efficiency is when you're a specialist, you've got some real experts. There are only so many hours in a day that that expert has. Therefore, the more we can remove tasks that allow the expert to be an expert, that's where we get efficiency. So if I can invest, we've been doing some of this with Cytora, if I can invest in operations, and I'll expand on that in a minute in terms of systems and processing data, that allows us to create more time for our underwriters or claims handlers to focus on underwriting or handling a claim, that's what we want to do. That allows us to then put more business through the same people because there is a limitation on how many experts there are out there in all these areas in the job within which we sit. But if I give you a couple of examples, so if I think of the simpler end, we can use data, we can use insight, we can use technology, and Cytora has played a big part in this, to help us augment the submissions that come in with external data, triage them, and get them in front of the appropriate underwriter quickly. Brokers appreciate that. They appreciate a quick response, and it clearly increases the likelihood that that broker is then going to place that business with Markel, which is what we would like. But, the key measure for me is we've got our underwriters focused on what they do best, which is underwriting, not administration processes. If I think about it in a more complex case, like a more complex care example, we have to pull together lots of data in a complex care case. So a care business may have many, many care residences, and pulling together CQC data, Care Quality Commission data, market data, other risk data, that's not the best use of an underwriter's skills. Getting that in an efficient way in front of an underwriter so that the underwriter is focused on underwriting, that's what we want. So when we talk about efficiency, that's about maximising the hours of an underwriter doing underwriting or a claims handler doing claims handling. That’s the way I think of efficiency rather than cost reduction.

Juan de Castro: Definitely. And that is very much, I think, how we can be the impact of artificial intelligence and other technology in underwriting is definitely not about automating the provision of the expertise or the actual underwriting. How do you augment an underwriter? So how do you remove all the manual activities and help the underwriter make the best decision, right?

Neil Galjaard: Yeah, and don't get me wrong, there are examples where we can automate to make it more efficient for people. So if I'm a broker interacting with Markel, there are some tasks I can do at a new business that I didn't use to be able to do at mid-term, for instance, which we've sold for them by giving them a tool that allows them to do mid-term adjustments online. That's a more efficient model, brokers are using it more, they want to use it more. So that's an interesting example where there is a process, where if you look through the chain, we perhaps all weren't doing it in the most efficient way. So there is an opportunity to do things like that. But the real enabler of growth is about making sure that what are effectively scarce skills and resources are put into the right place at the right time.

Juan de Castro: So you mentioned it is not easy to find underwriters or any other resources with the skills you need in such niche areas. So do you think technology also plays a role in onboarding new talent that might be less experienced than your traditional talent and getting them up to speed faster?

Neil Galjaard: I think technology and those other AI type solutions that we're hearing a lot about, for me, it's all about getting the data, the underwriting needs in front of that person in the most efficient way. I think what we put a lot of value behind is the knowledge and the experience of our people. And it takes a while for people to acquire that knowledge, that experience, that underwriting authority to be able to sit around those. Similar on claims. An interesting example we have in the claims world is actually in the solicitor's world rather than in the broker world, whereby there's a demand for a new product, and we created this new product, which results in many small claims through the process, and we built a tool that allowed the solicitors to actually go in there and do it themselves. Been a resounding success. 95% of everything new on that product line is going through that claims portal. And what's really interesting is solicitors love it. But that is a pure automation thing. And the knowledge around it is fairly simple. When you start talking about the skills required around the more complex risks that we write, I'm a firm believer that it's about the individuals that give us that insight. Here's a radical statement, right? So if everyone followed the AI rule set, ultimately, you wouldn't have a market because what would happen is everyone would end up in the same place. And what creates a market is different views and different opinions. So I think it can help a lot, but ultimately, what we want is people's views and opinions about the risk rather than what is calculated somewhere about the risk.

Juan de Castro: Playing back, if I understood correctly, it's definitely not about automating the risk in these more complex areas, but it's more about how to present the risk information in the most efficient way in front of the underwriter? So you do it fast, you do it with all the information required. We often talk about decision-ready risks, right?

Neil Galjaard: Yeah, and what we can do, and we've been working with yourselves on, is how do you assess the likelihood of that risk to be within appetite as a filtration process? So what you're doing is you're putting the ones that are most likely in appetite in front of an underwriter to enable them to refine the thinking around that, because some things very clearly fall out of appetite quite early on in the process. So I think there's a great role for data or insight technology to try and help us in that space, but I wouldn't want to see it underwrite some of the complex things that we do, because the detail and the nuances around that is what makes us a specialist underwriter.

Juan de Castro: Definitely. Okay, so going back to the chat about growing the business, you said you've grown threefold in the last few years since you joined. What is next? How do you see the next phase of growth of Markel UK?

Neil Galjaard: It's an interesting business to work in, and I've worked in a few now. It's a forever business. You know, we talk about that quite a lot internally. We'll always be specialists.

Juan de Castro: What do you mean by a forever business?

Neil Galjaard: We're not going anywhere else, right? So we're here as a business. We come from a strong base. So for those people that don't know, we were born in 1930, when Sam Markel founded the business in the US, and we've grown as a group at a tremendous rate. So it's the only point of reference I've got because you can only really get a market capitalization when it is listed. So in 1986, we listed it as a business and we were $15 million in market value. As of last night, we are worth $19 billion value. So we have grown so much over the last 30 odd years. But actually, it's still a business that is Markel. We'll come back to that, I'm sure. But the business that we're building across the world has a real common feel to it in terms of that longevity, in terms of that sustainability, and a lot of that comes from that idea of specialism. That's where we demonstrate our value. That's where the market recognizes the value. And therefore, we'll always deliver great service and great quality propositions for our brokers. We’ll continue to combine products and service. I think that's really important. So we use an example of Markel Care Practitioners in our care sector, but we have our own law firm, we have our own tax firm, so we use legal advice and tax advice because ultimately, the best service we can all do is helping a client avoid having a claim in the first place. So if we can work with our broker partners, with their clients to help them navigate the business world in a way that avoids a claim, then that's great for everyone. So continue to deliver great products and great service, continue to deliver products and services together. Increasingly, we want to bring the best of Markel to our broker partners. So that's about how we bring, say, our London market capability out to our regions. So when we talk about appetite and we talk about broadening appetite, that's a way in which we can broaden appetite, and new products potentially. We've recently communicated with bringing capabilities in fronting from the US. We have a business in the US called State National, bringing that to the UK to deliver an opportunity there, particularly in the MGA market, around how we could support that, and we'll be helping bring that to the UK. We touched on it earlier, but continue to work with our broker partners on areas that they want us to help them with in terms of things that are perhaps tangential to what we do today, perhaps even new areas altogether. But we will always have a sort of liability long tail angle to what we do, because that's the Markel model. We tend to work in products that have a long flow between premium and claim because then that gives us the opportunity to invest that in the investment markets, but also other entities that we own. So we're an unusual business. So we're a big insurance company, but we also have a big investment portfolio, much more than you would expect of an insurance company of our size. But we also have a business called Markel Ventures, where we own lots of totally uncorrelated businesses, other than they're all really successful businesses. And we invest in all three of those engines of the business. And so it's important on the insurance side that we write products that have long tail risk to be able to support the rest of that business model if that makes sense.

Juan de Castro: Let's imagine you want to triple the size of Markel UK in the next few years again. Some of it will be just by keeping on doing, delivering great service, delivering quality products. But part of it, I assume, is that you will keep on identifying opportunities to expand into new products that will feel similar, products that are specialist, products where quality of the product is important, they are not commoditized, et cetera. Is that something that you spend time thinking about? What's going to be the next one?

Neil Galjaard: One of the things we did last year was, we bought a business back in 2017 called the Electrical Contractors Insurance Company, which does electrical contractors insurance, funnily enough, but it is focused on that sort of lighter end of construction. We also had expertise in Markel before that around construction PI. So what we've now pulled together, this was last year, is the ability to do PI, PL, EL, all in one construction product that we've then taken to market and really bringing the best within our own capabilities in that construction sector towards the lighter end of construction, finishing trades, et cetera. We developed a tech solution about three years ago now that's getting all refreshed and coming out later this year where, again, we're trying to bring together not just great product but we are also trying to leverage some of our London market on this one to try and bring more support for more complex tax risks and international exposures. But we're trying to do it in a way which is, yes, it's a good quality tax solution, but it's what we can put around that. So when you talk about our legal expertise and our tax expertise, that's highly relevant in the tech sector. So R&D, research and development claims, and the ability to get tax relief on that. We have a team of people in Sheffield that are based purely on that sort of area of tax reclaim. And so, these are examples where, yes, specialists still, but definitely appetite to grow substantially in those areas. But you have to be careful. If you take construction as an example. You talk about construction and people think we're talking about the big buildings in London. That's not what we're talking about. We're talking about towards the finishing end, the lighter side of construction. But interestingly there, you can also bring in other support services around mental health, around legal document review. There are things that make it differentiated, and it comes back to what I talked about earlier, I guess, which is, yes, insurance and great quality insurance is really important, but actually if you can put great services around that great insurance, and I'm not just talking about the service to a broker now, I'm talking about the service that the broker can promote to the customer, then broker gets great credibility out of delivery of that extra service for the client, client possibly avoids a situation where they might end up their claim, and hopefully they like Markel through this and we get great sales and great retention.

Juan de Castro: Actually that is something that as an industry, we've been talking a lot about attaching services to the insurance policy that provide value to the end client and do claim prevention or mitigation. Probably the best example is SAIBA and very few providers that are really successful in that model, and I think you guys are definitely one of those. So I think this is something that probably you should promote much more because I think that really differentiates your proposition versus many others. But I definitely want to go back to the culture. You've explained plenty of opportunities to keep on growing new products, new services, your London market offerings, et cetera but one of the challenges is how do you keep the culture? So how do you keep a team that is providing that exceptional service, that keeps that expertise as you keep on growing? So I'm sure this is something that you think a lot about, and what are your thoughts on how to keep that culture as you grow?

Neil Galjaard: Yeah. And I think it’s probably the most difficult, if I'm being honest, in terms of how you do that. I mean, when I joined back in 2017, Markel was only a bit of what I inherited effectively. So we had some legacy brands and legacy businesses, and so we spent quite a lot of time making that one organisation. But it's interesting because it's not just a challenge for me in my bit of the business in Markel. Now, Markel operates globally, and what I would say is, If you turned up in any Markel office around the world, you'd know it's Markel. And there's something around the organisation. Back in 1986 when we listed the business the leaders at the time developed something we call the Markel style. And we try to stay true to that, right? And this was written in 1986, but it talks about honesty, it talks about fairness, it talks about respect, it talks about a sense of community, it talks about flexibility and spontaneity, but it also talks about innovating and winning. So it's a statement which grounds us in ambition. So we're an ambitious bunch of people, I would say, in Markel. I'd say we're fairly bright, fairly-, that’s not being too modest. But I think we're nice people as well. And I think that's the thing, you know, there's ambition, there's intellect, but there's actually a real sense of team amongst the organisation, and I would say no matter where in Markel you met Markel peoples, and that's something we hold ourselves too constantly. And the nature of the people that you work with, I really, really enjoy the people I work with, more so than I have done in any other organisation. And I think when you can get up on a Monday morning and get excited about going to work and enjoy the people you work with, that creates a real positive momentum in the business. So the next person that joins the business actually quite enjoys that type of environment and therefore has a vested interest in maintaining and promoting that environment. And so, it's not easy and sounds a bit purist and maybe some people might struggle to understand in terms of it feels a bit soft, but it is hard to specify what you do every day to try and create that, but you try and hold yourself true to it. And people would call it out if someone didn't behave in a way that was consistent with the Markel style. And there's a real sense of pride across the organisation worldwide around how we live that style. We've got our annual shareholders meeting in May, and we've got 20,000 people across the world, there are 10 people from across the world that are identified as Markel style winners this year, and they'll go to our shareholder meeting in May. And two of them are in our UK team, so I'm really proud about that, right? But what's nice is that it's about recognising people who live the style, people who really promote the culture of the organisation. It’s slightly embarrassing for them, but those 10 people will stand up in front of 2,500 people at the shareholder meeting, and we will call out why every one of those people lives the style. And I think it's just something that we try to hold ourselves to. When you come into the organisation, there is a risk that people say, this feels, this sounds unrealistic, I guess is the right word, but you don't hear it like this, you just see people behaving in a nice way. And so we're ambitious, I think that's really important. We really aspire to grow. If you buy shares in Markel, you don't get a dividend. We never pay a dividend. So we have to grow. So we're a real growth-oriented organisation. We want to work with people we want to work with.

Juan de Castro: That is fantastic. That type of culture is challenging to foster and create in a 100-person team, right? But I could see Markel UK in the next few years becoming larger and larger. How many people are in the UK now?

Neil Galjaard: In my team at the moment, it's just under 500, but around the world, we're 20,000 people.

Juan de Castro: So taking the UK example with 500, it's already quite a large team. By the time you get to 1,000, the question is, how do you keep on maintaining that, what you call the Markel style? And I really like your point about those individual moments when you mentioned the example of somebody calling out somebody else when they were not living those values. I think those are the small things that really enforce that type of culture, right?

Neil Galjaard: So when someone says go from 500 to 1,000, I get the point. That sounds like a lot of people are going to join in. How do you get them to experience and enjoy and promote that way of working? But if I say within that 500, I've got a law firm, I've got a tax firm, I've got a group of care practitioners, and I've got a bunch of insurance people. The cultures in law firms typically are different to the cultures in insurance firms. They're typically different from what you'll see in a tax firm. And our care practitioners have a completely different perspective on business than what we do. But we've bought three businesses in my time since I joined as well. And so people have come from different cultures and different backgrounds. And so if you say I'm mixing that whole range of disciplines and people that have been with us for 35, 40 years and people that have been with us for three months, and it still has that sort of sense and feel. And we still have to work at it every day, but if we went and bought another business and put it in there, if we went and developed a new skill set and put it in there, I don't think it's a different challenge to the one we've come through over the last seven years. But it is important. I want to go to a place where I enjoy going to work. And it's important to me personally, but I think it's important for all our team that when you get up on a Monday morning, it's somewhere you want to go. And if we can do that, we have people that are happy in their work. And I come back to where we were starting out. Markel is a people-powered business. We can only deliver the service that we deliver to our brokers and to their clients through our people. And if our people feel this is the place for them to be, they will work at their best and deliver the best service.

Juan de Castro: This summary, I think, as you said, it's brought everything together. It's through the great culture, that you have great people who are ambitious and willing to support brokers and clients, and that is the way you deliver fantastic service. My last takeaway before we wrap up, I think you mentioned some of the values of Markel, but you mentioned two of them, which really resonate with my experience working with you, which is ambitious and nice. And you're totally right that that is a common theme across everybody I've met at Markel. So congratulations, you and the rest of the Markel team for having created such a strong identity and such strong values.

Neil Galjaard: Well, thank you. But clearly, if we're ambitious, that's not enough. So we've got to keep going. But thank you for doing the podcast, I think it's really nice to be able to talk about it. Whenever we talk to brokers, we try to explain what it is, what the model is and what we're trying to achieve. But it's nice to have this chat with someone who works with us and helped us on this journey when we talked earlier about efficiency and making sure that our people are optimised in doing the best they can do.

Juan de Castro: Fantastic. Well, thank you so much, Neil, for the chat. I really enjoyed it.

Neil Galjaard: Thanks a lot.

Juan de Castro: Making Risk Flow is brought to you by Cytora. If you enjoy this podcast, consider subscribing to Making Risk Flow in Apple Podcasts, Spotify, or wherever you get your podcasts so you never miss an episode. To find out more about Cytora, visit cytora.com. Thanks for joining me. See you next time.