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London-based BMS Group Ltd. recently opened an office in New York and announced that the new office would be the base of Group CEO Carl Beardmore. Mr. Beardmore recently discussed the development with Senior Editor Mark A. Hofmann.
Q: Why move to the United States? Why now?
BMS has had a presence in the States for a number of years, but it may be described as not widely publicized and probably not as expansive as it needed to be to make head roads into the market. About 18 months ago, we moved to a new strategy where we determined that, as a group, we'd like to create the alternative to the big players in the marketplace. And in order for us to do that, we needed to have a far more visible and expansive presence in the U.S. to persuade clients to trust us with their business. It's very much on the back of a new strategic direction for BMS Group, and very much on the back on what the clients are telling us they need to see from us to allow them to support us with our business.
Q: Will the actual headquarters of BMS remain in London?
The headquarters will remain in London. I will be splitting my time in a way, which means I will spend a majority of my time in the U.S., but obviously we still have very important obligations within London. In order to fuel and drive the reinsurance element of our strategy, which is a very U.S.-centric strategy for the time being, I just think it's right that I spend an appropriate amount of time in the U.S. supporting the reinsurance strategy and placing me very closely to the clients. I have an aspiration to be seen as the most accessible CEO in the marketplace. In order to do that, I have to spend more of my time in the U.S. than I do in London.
Q: Have you already moved to the United States?
It's something that will be a transitionary move. We were delighted last week to announce the opening of our New York office, which is a significant step forward in the expansion of the U.S. platform. The opening of that office acted as a catalyst for me to start the process of me transitioning my time and my location so that most of my time will be spent in the U.S. I'm expecting it to be a three- to four-month process before it's balanced out to what you might call a normal operating level.
Q: What makes the U.S. an attractive marketplace for BMS?
It's not just for BMS—it's still one of the largest reinsurance marketplaces in the world. It's attractive from that respect, its overall potential. It's attractive for BMS because although for the majority of its existence BMS has been a correspondent broker, it has been a correspondent broker for reinsurance generated from the U.S., so it's a market that we understand. It's a market in which we're well-known, as we have a lot of good relationships. Therefore, we feel it's a natural extension of what we have been doing to move it to the next level and become a credible expansive platform that can generate business on a direct basis as opposed to a correspondent basis.
Q: What are BMS' long-term goals?
As a group, our long-term goals are to create the alternative vehicle to the big guys. The markets both in the U.S. and worldwide are concerned about the amount of dominance that the three big guys have. They would like to see the emergence of an organization resembling, say, Benfield of the past. Our long-term aspirations are to create an alternative, valid, independent broking enterprise that is perceived as the go-to place because we provide the best risk transfer solutions, the highest levels, and we offer truly independent advice.
I guess as a marker of our progress, we plan to at least (double) the size of our current operation by 2016. But I must stress that includes also building out the other elements of our business—which primarily operates out of London—which are our wholesale and underwriting activities. The reinsurance part of the strategy is extremely important, but we have extremely important ambitions for the London side of our operation, too. Hence the reason why I talk about the majority of my time being in the States, not completely my time being in the States.
Q: Where do you see growth areas for BMS?
I think the growth opportunity is there in the traditional arenas in which we've operated. On the reinsurance side, the normal property/casualty treaty business; on the facultative side, specialty casualty, med mal—we have a strong historical presence in those sectors. I think by having this credible, highly recognized expansive platform in place, we will be able to build considerable additional market share in those areas we know and understand well.
I would like people to understand that as a group as a whole, both on the U.S. and on the U.K. side, we have a very ambitious strategy. We have made tremendous progress in 2011. And we know already that we will be making considerably more progress in 2012. We're on a journey and we're enjoying it.
Q: Where do you see the reinsurance market right now?
It's a difficult market at the moment because it has been tough during the past 12 to 18 months. From an underwriting perspective, they are feeling the need to move rates to compensate for the losses they've incurred.
I think it's going to be a slow and steady uplift in the business as opposed to a radical change. It's a tough market, but there are still ample opportunities for people to develop good strong businesses.