<p><strong>Speaker 0</strong>: <span>Alan, can we start with a little bit about what Touchstone does and how the business is faring at the moment, particularly in the light of covid? Because I think you specialise in a handful of areas that have probably been pretty badly hit by covid over the</span></p> <p><strong>Speaker 1</strong>: <span>last couple of years. Yes, definitely. I mean, we specialise in four areas, which is the property and commercial hospitality, leisure, travel and tour and liability and construction. And, uh, we are now a sort of 15 16 year old company. So we've been around a long time,</span></p> <p><strong>Speaker 1</strong>: <span>and we had our issues with covid like everybody else did. And two of our particular sectors struggled, which is the travel and tour, because people couldn't travel anymore and because they couldn't travel. The the sort of the way we dealt with that business was we were reducing wages, turnovers. We were trying to keep the policy holder as such, but we weren't able to, uh, get the premiums that we'd been generating in the past because people weren't travelling.</span></p> <p><strong>Speaker 1</strong>: <span>Uh, the other area was the hospitality and leisure and hospitality and leisure. We all know what happened to hotels in that you know the hotels, um, stopped operating and people couldn't go there. I think with Brexit also happened in that the the workforce had moved back to Europe and was working from there. So it put a lot of stress on the business. But like every other businesses, I think in the covid time people diversified.</span></p> <p><strong>Speaker 1</strong>: <span>And I think that diversity, um, from a sort of like an SME, the grocery store suddenly starts to do the launderette. He starts doing the laundry, he starts selling other things. And what we did is we actually, um, found a niche property offering.</span></p> <p><strong>Speaker 1</strong>: <span>And that niche property offering was covering in various angles layers for primary covers, various different ways in which we could skin that cat. Um, but the big one was cladding. Nobody wanted to ensure cladding. Um, but we were able to, uh, through one of the our underwriting capacity providers</span></p> <p><strong>Speaker 1</strong>: <span>have a discussion about what we could do. And we wrote, um, that type of business in that period. So Touchstone actually grew in covid. It didn't reduce back. What is nice is that the travel and tour world is back because people want to go on holiday and I think UK. You know, people have actually kept their money back for the holidays because that's what you know. It's one thing they look forward to, so our numbers are rising,</span></p> <p><strong>Speaker 1</strong>: <span>the hotels are back and open and they're there. Um, but we still have the nice property. So therefore we we're in a position that, um, it's moved us on on nicely.</span></p> <p><strong>Speaker 0</strong>: <span>One thing with underwriting is, is how much capacity is there out there at the moment? What what's what are you finding the areas you specialise in and and what are some of the issues that's throwing up for</span></p> <p><strong>Speaker 1</strong>: <span>you? So capacity is always the issue and from an underwriting M g A, which is what we are. We have to really outperform the insurer's own business if it's a similar if they write a similar business. So,</span></p> <p><strong>Speaker 1</strong>: <span>um, but certainly Lloyd's are really good at delegated authority for underwriting. And, um, one of our major capacities are, and they are looking for opportunities with us to grow more and more. We made a decision about 10 years ago because we had too many capacity providers and we wanted to concentrate on only having 3 to 4, possibly five. And at the moment we have three major ones and one just sort of coming through and another one to follow. Hopefully soon.</span></p> <p><strong>Speaker 1</strong>: <span>Um, but what they do is we try and pick the types of business that they want to look at. Um, and when you then start to build the critical mass with those insurers or those capacity providers, what it does is that when you're looking for something different, um, they know you. You don't have to go through the compliance, the jumping, the hoops to be a Lloyds cover holder. All those sort of things are not there anymore, because you've done all that and you've actually got the confidence of them. You know, the underwriters, the people that you refer to,</span></p> <p><strong>Speaker 1</strong>: <span>and so we really that focus for us on that has been the best thing that we ever did because we have, you know, big, big, big accounts with our three major players.</span></p> <p><strong>Speaker 0</strong>: <span>But when you were looking at, I mean you mentioned cladding a little earlier when you were looking at that, What? What was their view? As as was it? You know, Alan, nobody else wants to be in that area for a reason. Don't be that sometimes the crowd is wiser than you are or great opportunity.</span></p> <p><strong>Speaker 1</strong>: <span>We looked at it as an opportunity because we felt that people were not being able to get that insured to full stop. And even the composite insurers were asking us, Could we do something about it?</span></p> <p><strong>Speaker 1</strong>: <span>Um, and the reason that we were able to do something is a particular underwriter that we're very, you know, knows us. But he's a global property underwriter. So he writes earthquakes, he writes. You know, all that sort of storm in Canada or wherever it is.</span></p> <p><strong>Speaker 1</strong>: <span>So he understood what we call high risk business, and to him, it was I can give you that facility, but I don't want to ensure everything fully. But I'll give you the possibility of writing a primary cover or a start point Um, when you'll have to fill up the capacity with other followers, which we did. Um, so it was, um, the ability to identify that. But is the ability to actually tell them how we were going to do it?</span></p> <p><strong>Speaker 1</strong>: <span>And the one thing that Touchstone, um, does do? Is it it it the underwriters that we have are quality underwriters who are really good at doing their business. And they're not just sort of a, um a tick box is a number. It really is proper underwriting. When you get into that and say, I'm I'm hopefully I'm touching wood But the performance has been</span></p> <p><strong>Speaker 1</strong>: <span>good for everybody. Um, those cladding properties will not be there soon because the government's facility of getting them repaired and back, but therefore that's moved us into other areas. So we now do you know, the sort of, uh, the fishing, the cooking, you know, the smoking of the haddock and that sort of thing.</span></p> <p><strong>Speaker 1</strong>: <span>Food manufacturers is another area, and, um, we're even looking at sort of the hotels that are moving to the asylum seekers side. So even that product is diversified over the last two years, because of the cladding was the number one. But as that starts to to move away, then, uh, we'll move into other areas.</span></p> <p><strong>Speaker 0</strong>: <span>But on this capacity point, I mean, you you were saying you you prefer to have deeper relationships with a smaller number of carriers because that keeps the capacity coming through. They know you. You know them. But if there's less capacity around full stop, do you worry that, um, some of those who are backing you might say, Well, we like you, but we can only give you 50% 60% of what we used to provide</span></p> <p><strong>Speaker 0</strong>: <span>and you need more carriers sort of on panel. If I can put it that way, how would you cope in</span></p> <p><strong>Speaker 1</strong>: <span>those? I think there's always a worry as to whether the carriers have the, you know, the capacity or the appetite to to want to do it. I think that's when we come back to our performance. If our performance is good, they'll continue to work with us. And if we bring new areas to them, I think they will</span></p> <p><strong>Speaker 1</strong>: <span>look at it and and and try and back as, uh as to sort of write more business in in that area. Because we've proved ourselves and to, you know, to be an M g A. This day and age, with compliance with all the rules and atlas for Lloyds and cover holder status. There's a lot of hoops that you have to jump through, and we've done that, so it's easier to add a product to an existing binder than it is to start a new one.</span></p> <p><strong>Speaker 1</strong>: <span>That doesn't mean we're not looking for other other new providers, either. So we have got, like I mentioned earlier, three major ones at the moment, with probably four and five not not far away, but in different areas and different products. So there's there is capacity,</span></p> <p><strong>Speaker 1</strong>: <span>Uh, for I would say you provided you can prove that you've performed well and you've got good quality underwriters. And I think you know that's that from touchdowns. Perspective is what we've tried to achieve</span></p> <p><strong>Speaker 0</strong>: <span>coming back. I mean, running throughout this conversation, this this theme of how you diversify your business and</span></p> <p><strong>Speaker 0</strong>: <span>and actually how tough it can be to diversify. Um, I mean, do you have thoughts of moving into new areas</span></p> <p><strong>Speaker 1</strong>: <span>very much. So we, um already we have in the pipeline. We have another specialist property offering, which is a line of business that we can sort of put forward either as a primary, a follow an excess layer. We're looking at Marine. We're looking at marine cargo. We're looking at cyber.</span></p> <p><strong>Speaker 1</strong>: <span>Um, we're looking at, you know, probably four or five. We're even doing an engineering inspection facility, which is unusual because it's not necessarily underwriting, but it's a service. Um, and what we're trying to do is you've added value to our broker panel, Um, so as they sort of deal with us, the more types of opportunities we have to give them and say, Did you know you did the hotel? But you can do the engineering with us, et cetera, et cetera, is the way that we want to to try and do it so that we are becoming I mean, our motto is</span></p> <p><strong>Speaker 1</strong>: <span>the the first choice for brokers.</span></p> <p><strong>Speaker 0</strong>: <span>But again, just back to that diversification point, I can see how, in some areas you say, Well, that's a natural adjunct to something we. But there must be other areas. We think that just totally different</span></p> <p><strong>Speaker 1</strong>: <span>from anything we've ever seen. So so therefore, what we look at in there and and we we've actually sort of grown organically over the last 13, 15 years, 2007, we were established. So by doing that growth, we've acquired people, um, to actually make us better. Um,</span></p> <p><strong>Speaker 1</strong>: <span>recently, in the last 2.5 years, we've got business development underwriters up and down the the country. So there's seven or eight of them dealing with a panel of brokers selling our ways, telling those brokers what our appetite is and hopefully, you know, making sure that we can win the business.</span></p> <p><strong>Speaker 1</strong>: <span>I think the future for us is to do more of that. However, there are some products, and there are some areas that we want to get in that we will have to acquire. So we are now acquisitive, um, business. We are part of the 17 group and the 17 group do have a A fund, um, available to us for the right acquisitions. But the acquisitions are going to be complementary, not necessarily the same.</span></p> <p><strong>Speaker 0</strong>: <span>And funny you mentioned there a team out working closely with brokers to help build that business. What are some of the things that you can help brokers with and provide them with a given the back this backdrop, we got inflation, cost of living crisis.</span></p> <p><strong>Speaker 1</strong>: <span>Absolutely. So</span></p> <p><strong>Speaker 1</strong>: <span>covid came along, and obviously people were worried about how do we speak to the brokers, et cetera. But we've always been using video, so we used to think it was called Blue jeans at the time. But of course, everybody's moved to teams these days, but teams enabled us to actually get to those brokers and speak to them. Um, even though they were working from home or laptops or whatever, Uh, we were able to have a chat. I think what happened to the Composites is because they weren't geared up for that type of approach. We've always had that type of approach because of the way we've been structured,</span></p> <p><strong>Speaker 1</strong>: <span>and the service that we provided to them was second or not. And I think M. G. A s have proved themselves in that way in that people wanted to have quick answers, wanted someone to speak to someone to deal with not. Here's a mobile phone of somebody that used to work in the office and is nowhere longer there. So that's one area that we've done so that brokers have really come and said, you know, the compliments that we get on a regular basis about the service, the speed because we've got I t. We've got platforms, we've got broker platforms, we've got all the right things.</span></p> <p><strong>Speaker 1</strong>: <span>Um, but one interesting one at the moment is rebuild cost assessments.</span></p> <p><strong>Speaker 1</strong>: <span>So we are talking to brokers saying that we have an arrangement with R C A. And you can jump on the back of that. And really, do you want to be offering your client a 18 to 19% index linking on a property? Or would you prefer him to pay a small amount to get a proper rebuild cost assessment on that? And we've tried a pilot of it, and the outcome has been really,</span></p> <p><strong>Speaker 1</strong>: <span>really good. It's been positive for us because the sums insured have gone up. But it's been positive, I think, for the broker, because he's now of offering the correct information to get terms on and the clients in a position that he knows he's not going to be under insured in the event of a loss. So areas like that are very much, um, the things that we want to try and do. Um, that's more property related.</span></p> <p><strong>Speaker 1</strong>: <span>Um, with regards to construction, we're always looking at the turnovers and and wages. So minimum deposits are the sort of area that we would, uh, try and help those clients with.</span></p> <p><strong>Speaker 0</strong>: <span>We have to do that. Alan Roath, Thank you so much for joining us. Thank</span></p> <p><strong>Speaker 1</strong>: <span>you.</span></p>