Accelerating growth within trade credit

16 September 2022

Markel International, London

Simon Philpin, head of trade credit at Markel International, stresses the importance of broker relationships, speed of service response, and connectivity, as he takes the trade credit team to the next level.

This summer, Simon Philpin officially took the reins as Markel’s head of trade credit – bringing over 20 years of underwriting experience and expertise to his new role. Simon started at Markel International in 2014 during which time he has held positions in underwriting and business development; where he’s demonstrated the core technical expertise, as well as a good understanding of the importance of portfolio management, distribution, and service, to accelerate further growth in Markel’s trade credit class of business.

Outside of his day-to-day role, Simon is chairman of the Association of British Insurer’s Trade Credit Committee, and regularly participates in speaking engagements and market commentary to drive positive change and encourage best practice among insurance professionals operating within trade credit and the wider insurance industry.

In this interview, Simon discusses his plans and targets for Markel’s trade credit team, which includes a focus on three core areas – speed of service response, connectivity, and broker relationships. 

Why was it important for you to secure the role as Markel’s head of trade credit?

Simon Philpin: Our trade credit team in the excess of loss line is one of the most respected teams in the insurance industry. We are highly regarded by our brokers and have experienced significant growth since the trade credit unit was established at Markel International 12 years ago.

I am a target-orientated individual and so if you take the growth from our trade credit operation and align it with Markel’s growth strategy – which aims to double the size of its insurance business by 2025 – there’s a huge amount of potential for this class of business, and I believe we have the team to achieve our ambitious targets. 

What are you most excited about starting in your new position?

SP: As a team, we are encouraged to set and hit our growth targets, which is something that always gets me out of bed in the morning. I also like the personal and professional relationships that we have built up with brokers and I look forward to developing them and building new ones as Markel’s head of trade credit.

Our trade credit targets by 2025 are significant. We are seeking profitable growth, especially with our major trading partners, and I believe we can achieve that because of the great potential that I see in the trade credit team and product. We also recognise the need to invest in new IT platforms, which will streamline our capabilities; allowing us to be more nimble when dealing with brokers. 

What other plans and ambitions do you have for the trade credit team?

SP: Our trade credit team is good at making decisions, thinking on our feet, and being creative in what we do. In my new position, I want to see more of that. Equally, I think we can do more for our brokers by sharing our knowledge with them. One way we have done this already is by training brokers so that they acquire a good understanding of our decision-making process.

Our brokers are our clients so we need to help them as much as possible to bring new business into the market, which we are doing by looking into investing in sales training technique days for them. We are planning to start this off as a pilot in the UK and if it’s successful, we’ll look to do those sessions more globally across our operations in the Middle East, Asia, and United States.

Under your leadership, how will you continue to provide a first-class service to your trade credit customers?

SP: With my global position, we want to build on our speed of service response, connectivity, and great broker relationships across the Middle East, Asia, and United States. The success that we’ve had in the trade credit team so far has primarily been through relationships, the speed of service, and being clear in our strategy.

The brokers we deal with understand what our target market is and customers are satisfied with the policies we put in place for them; hence why Markel Trade Credit is top in the broker report cards that we see against our peers.

Can you tell us more about your responsibilities and the projects you’ll be getting involved in?

SP: I will actively be involved in leading Markel’s trade credit teams in London, Asia and the United States, so that we can continue providing a first-class service to our brokers, while strengthening the organisation’s leadership position in the excess of loss trade credit market.

I will also be responsible for looking into projects and initiatives for 2023, that will not only raise our brand profile, but also help us to stand out from competitors and new entrants in the marketplace. We have always been very good with consistency on our offering with regards to policies and our target audience. I would like to think we can improve our urgency when it comes to business development; that’s not to say the team is not great at this already, but I believe marginal gains is key to staying ahead of the pack. 

What challenges do you think will affect your clients and brokers and how is Markel’s trade credit solution helping to address them?

SP: The trade credit market is dominated by three large carriers who have acquired 70 percent of the market over the last circa 70-100 years. The main product they offer is cancellable insurance but at Markel International, we offer a non-cancellable solution as our primary product, which is seeing considerable growth as more and more corporates build their own credit management teams – leading to a requirement to have a more hands-off approach with their policy. 

The cancellable product is run by an insurance firm that monitors the risk profile every day, but with Markel’s non-cancellable product, it provides a high level of autonomy for insureds which is what many of our global customers are seeking. When an insured takes out our policy, providing we are content with their credit management processes and they have successfully passed our audit, we will essentially hand them the underwriting pen within certain parameters. The insured will then manage the risk(s) themselves.

It’s evident by the growth we are seeing each year that our non-cancellable product is gaining traction, as more and more corporates prefer the autonomy with our policies, which includes non-cancellable limits. If the insured is financing their receivables, the non-cancellable limits provides certainty with their working capital financing.

Where do you see the market going for trade credit in 2023?

SP: We are expecting insolvencies to increase because of the withdrawal of the government stimulus packages which were introduced to support businesses during the pandemic. Businesses are now having to repay some of those Covid loans and with the increase in inflation as a result of the Russia-Ukraine war, some companies are under a lot of pressure to either pass on those costs or survive by squeezing their own margins.

We do expect to see an increase in claims over the next 12-18 months, which is where our product comes into its own. We tend to see an increase in requests for our product during a recessionary period, as insureds seek certainty of cover.

Do you have any podcast recommendations for those working in insurance?

SP: I enjoy listening to the High Performance Podcast by Jake Humphries. This podcast interviews successful individuals in business and sport, and it’s intriguing to hear what they class as ‘high performance’.

To my knowledge, high performance is doing the small things right all the time. As the old saying goes: consistency is key!

In 2021, we did a series of Class Conversations podcasts which took the view of our global broking houses and some of Markel’s clients. We discussed how they have performed throughout the pandemic and with new and improved online capability how this has impacted their day-to-day business activities. It would appear that the vast majority of businesses are happy with a hybrid model, which, in some cases, has shown more productivity.

Do you have a role model that has helped shape you in your career?

SP: My father because of the work ethic that he instilled in me at an early age. He was one of the most hardworking people that I know. Through him, I learned that if you have this trait and a thirst to learn, you will go far in your career.

What advice would you give to those who are starting out in their insurance careers?

SP: You need that spark and burning desire that gets you out of bed in the mornings. By having a good work ethic and enjoying what you do, you’ll excel in whatever industry you’re working in. 

About Markel International:

Markel International is a division of Markel Corporation, a US-based holding company trading on the New York Stock Exchange (NYSE: MKL). Markel International writes insurance and reinsurance business through six divisions and through offices across the UK, Europe, Canada, Latin America and Asia Pacific. Markel International’s insuring entities include Syndicate 3000, Markel International Insurance Company Limited, Markel Insurance SE., and Markel Resseguradora do Brasil S.A.

Its UK national markets business also provides legal and professional fees insurance cover as well as legal and tax consultancy services.