Insurance Times 30th April 2009

Charles Crawford is to leave RBS Insurance (RBSI) to become group chief executive of loss adjuster Davies.

He will leave as managing director of partnership and international business at RBSI in July to replace managing director Mark Chapman at Davies. Chapman will now become deputy chairman.

Crawford will be given licence to grow the company, which is currently going through a regeneration of its IT platform across the group.

Meanwhile, Chapman will focus on the client facing aspects of the business.

Last year Davies completed a £27m management buyout that ended its long-standing partnership structure.

Mark Chapman said: “Since we completed the MBO, the business has seen a period of change and sustained growth. During this time it has become ever more apparent that our clients are looking to us to continue to deliver genuine added value and innovation to their claims services."

Post Magazine 30th April 2009

The art market is an unusual one, with a few niche areas rising in value, while others fall by the wayside. Veronica Cowan reports on the switches in fortune

The art market is nothing if not fickle. While some niche areas and artists are bucking the trend, the Mei Moses annual index, released on 7 April, reveals art prices fell by a massive 35% in the first quarter of 2009.

Contrast that with the five years to 2007, when art prices rose by an impressive annual average of 20%, as worldwide wealth spawned new collectors and markets in places such as Russia and Asia. But the signs of a switch in fortune were already present last year, after art prices fell by 4.5%.

As the downward spiral accelerated, collectors cashed in their purchases of post-war masters - the hardest hit according to the index, which combines New York and London prices. Generally speaking, post-war and contemporary works, having earlier soared in price, have now fallen the furthest.

So, how does this square with the record sale prices for fine art and other collectables, including that of South African and Greek artists, recently reported by auction house Bonhams? Well, first of all, those sales took place last autumn and, secondly, some niche areas might be proving recession-proof.

Take the apparent resilience of the Chinese market - a Qing vase sold for $6.1m (£4.1m) as part of an $89m lot at Sotheby's April auction in Hong Kong. The South African and Greek art sales are also relatively esoteric areas, according to Clare Pardy, fine art underwriting manager at Ecclesiastical Insurance. Robert Read, fine art underwriter at Hiscox, agrees, saying that neither group is representative.

Remaining stable

Works by old masters, which had become a less fashionable genre in recent years, have proved more stable and Mr Read remarks that, at a time like this, quality tried and tested items remain firm. "In a recession things revert to the core market of real collectors. The market is devoid of speculators at the moment, which is why huge profits have gone, but true collectors are always looking for quality." He cites the record-breaking Yves St Laurent-Pierre Berge sale in February, which saw a string of world auction records tumble in the private collection sale of art and antiques at Christie's in Paris, totalling EUR373.9m (£334m). The collection included impressionist and modern art, as well as 20th-century decorative art, but it was a blip, says Mr Read, who notes that the haute couture designer had a good eye and did not argue when looking at the price of something good. "They come on so rarely that we won't see this again for another generation," he predicts.

Old masters are always favourites in a downturn, agrees Matt Coles, a specialist valuer in the Davies Group's fine art and antiques unit. He explains they represent a part of the art market that consistently remains stable, while "markets grow and fall in Victorian art, impressionism, modern art and contemporary art". He adds: "Don't forget that, although Christie's and Sotheby's represented approximately 75% of the world's turnover in auction sales of fine art in 2008, they only represent 16% of the total transactions - according to Artprice.com. The majority of sales in art are under £100,000 - and not the millions of pound marks that hit the headlines." Asked to explain the art market performance in the first quarter of 2009, the chief executive officer of Artprice, Thierry Ehrmann, comments: "Art market prices continued to fall early in 2009, but less sharply as confidence in it rose, from -14 in November to +14 in March. The market hasn't entirely regained its confidence but the crisis offers collectors interesting prospective artwork acquisitions. The strength has shifted in a brisk and brutal re-evaluation of prices - demand is once again becoming the key element and supply is adjusting to the economic conditions."

Turning to other valuables and collectables, Ian Davies, household products manager at Home & Legacy, says there is still an appetite for niche pieces, and specialists are seeing spikes in prices. Bonhams has also highlighted vintage musical instruments as a desirable form of art, and this is one niche market in which Heath Lambert's private client division is heavily involved. "Collectors are usually enthusiastic amateurs and some stringed instruments are worth a huge amount of money," says Richard Northcott, managing director, who adds that "values have consistently risen". And Julian Roup, spokesman for Bonham's, reports that its auction of musical instruments in March totalled £526,800, with such items as a silver-mounted French violin bow of the JB Vuillaume School, an Italian cello attributed to Stefano Scarampella and an Italian violin by Giuseppe Lucci going under the hammer.

Volatile valuations

Price variations must wreak havoc with insurance valuations, and Mr Read says significant amount of underinsurance remain. "Even when modern art adjusts downwards, most people don't have single interests, so you have to look at the value of their entire collection."

Andrew Jobson, executive director of the estates and private client practice at HSBC Insurance Brokers, comments that top-end clients are surprisingly price-conscious, despite their wealth. "This demonstrates that everybody is affected, and the rich are looking at their art and antiques and questioning their values. Some insurers have reduced index-linking to practically zero, but not all are doing this and need to look at it," he says. He continues: "All high net worth insurers - bar one - allow the client to choose the value and brokers should ask clients if they want to reduce this. It makes them competitive and should help clients, because they need an awareness of what is happening in the art market." As to the impact on premium income, he says there is no reduction in premium rates: "This is because insurers are not making much money from HNW, and there have been a lot of expensive claims for fires and frost-water. So, the insurance cycle generally is not in line with the recession."

Coupled with this, HNW insurers are seeing an increase in general burglary, but this is not yet turning a profitable portfolio into a loss-making one, according to Mr Northcott. From a risk perspective, he says most clients have high levels of security, but nine out of 10 specialist insurers underwrite on the individual more than on the level of security, because "the right people take care anyway".

Educated clients

Policyholders obviously do not want to pay more than they need to for cover, and Mr Davies comments: "Clients are generally well-educated in what they buy, and are getting items re-valued downwards." He has also noticed an increase in business for valuation companies as clients and insurers seek revaluations. But Ben Doveton, managing director of Aon Private Clients, makes the point that, because art is traded in Euros and dollars, premiums are still going up for UK policyholders due to the weakness of sterling.

The number of theft and malicious damage claims in the first two months of 2009, compared with the same period last year, increased by 30%, according to Mr Davies, but specialist insurers have not seen any specific increase in targeted burglaries. "Stealing art is the dumbest form of theft," remarks Mr Read, "as there is no chance of getting rid of it at its true value." He does, however, predict more fraud "and people will be more aggressive in what they are trying to claim".

Ms Pardy says there have been some high-profile country house thefts - where porcelain and bronzes have formed a significant part of the haul, plus one example of an important Chippendale piece from a Yorkshire country house - but remarks that it is difficult to link recent trends in the art market to thefts as there is often a time-lag between what is happening now and what thieves traditionally see as being attractive. Mark Bosshard, fine art underwriter with XL Insurance, says he has seen "no sudden surge in theft, and increases in claims have not been as high as it was perceived they might be. You really need to be an expert to know what you are stealing."

The burglars, who stole a rare bronze statue of a horse - worth an estimated £200,000 - from a garden in Lingfield, Surrey, in April, seem to have had such expert knowledge. Mr Read believes this could be part of the trend for stealing metal sculptures for their heightened scrap value, although he agrees that the crash in commodity prices, linked to the downturn in the Asian economy, has prompted such targeted thefts to go off the boil. Mr Northcott adds that fine art does not tend to be targeted, because it is difficult to fence, observing that such thefts tend to be to order and for ransom. Indeed, most commentators remark that damage in transit - between houses and to 'on loan' exhibitions - make up the majority of losses in the fine art sector.

According to Bonhams, jewellery is a solid asset in a global economic downturn, but from an insurer's perspective it can pose a bad risk due to its portability and ease of being stolen and disposed of. This includes being melted down and separating the gems from the gold, making the chances of recovery poor.

John Wakefield, managing director of Connoisseur Policies, avoids risks where the jewellery element is too high but will look at them where this is proportionate. Mr Doveton adds that because the price of gold is going up, jewellery values are increasing, leading to more theft of jewellery than art. While Ms Pardy reports that, traditionally, insurers have been particularly nervous about silver and jewellery as such items can be resold quickly - either by being broken down or because they are difficult to identify. The approaches to underwriting art and jewellery are, therefore, quite different, notes Mr Northcott. With jewellery, the underwriter might want details of wearing levels, lifestyle and whether the client travels with the jewellery, to tailor cover to use.

Recovery successes

On the good news front, technology appears to be enabling greater recovery successes in the field of stolen art. In 2007, the 10th Duke of Buccleuch announced that his family's version of Leonardo da Vinci's Madonna with the Yarnwinder (circa 1501-07) had been recovered, having been stolen in 2003 from Drumlanrig Castle. Mr Coles says one of the general obstacles to recovery is the lack of details about an item. "For a recovery to be made satisfactorily, all parties have to agree that the object found is the same as the one stolen. This can be hard to achieve if the only detail you have of the stolen object is 'a portrait of a gentleman'." He advises all clients with high value collections to have a formal valuation, failing which "photographs are an invaluable resource in identifying and recovering stolen items. They can be taken quickly, in each room, and stored on CD or via any other electronic method. I can't emphasise enough how important photographs are."

So, what degree of information sharing takes place between specialist insurers, brokers and auction houses or specialist shops to prevent stolen items being re-sold or tracked effectively? According to Mr Coles, there has been a great deal of such activity between auction houses, dealers and insurers. "Most goes through the Art Loss Register, and the database of stolen art is cross-checked with auction catalogues. The antiques trade is also able to check the register for items before making a purchase." As to how policyholders are alerted to developments, Mr Wakefield clearly keeps a weathered eye on prison releases. "While there is no increase in targeted burglaries, we know some people with form for this kind of thing have recently emerged from prison, and we share the information with our clients."

As to how fickle the market is and, thus, what the next 'big thing' will be, Mr Coles concludes: "One growing fashion in the art market has been for 'urban art', with Banksy being at the forefront. But prices appear to be dropping off almost overnight, so I suspect we will see a few false starts as the auction rooms look for that new market they can exploit."

Post Magazine 30th April 2009

Charles Crawford, currently managing director of the partnership and international business at RBS Insurance will be joining the Davies Group in July as group chief executive officer.

Following the Group’s management buyout last year, Davies said the leadership of the company needed to be split between delivering outstanding service to its clients, and creating and driving an ambitious strategy for growth.

With Mr Crawford’s arrival, Mark Chapman, the current group managing director, will focus on client facing aspects of the Group and will assume the role of deputy chairman.

Mr Crawford said: “I am proud to be joining what is one of the most established and well respected brands in claim solutions. Davies has time and again proven itself as a significant player in the claims arena and I am relishing the opportunity of leading the business forward.”

Mark Chapman added: “Since we completed the MBO, the business has seen a period of change and sustained growth. During this time it has become ever more apparent that our clients are looking to us to continue to deliver genuine added value and innovation to their claims services. With this in mind we felt it was vital that we evolved our management structure to make sure we remain capable of professionally directing the company whilst keeping the needs of our clients absolutely front and centre in our thinking. Charles, who brings with him strong and current experience of the insurance industry, will certainly ensure we achieve this and I am delighted to have him join us.”

Loss adjusting company Davies Group has made three strategic board level management appointments and spoken of its plans to invest £1m in technology.

Following the announcement in March this year that Davies had raised £27m in private equity money for a management buyout, the company has been working to reorganise its management structures.

The business has hired Gary Lumsdon as group finance director, Sandra Postles as group HR director and Joe Mernagh as IT director.

Mr Mernagh, who previously worked as a director-level IT consultant, will oversee Davies' plans to improve its IT systems, which is expected to take up to 18 months to complete.

Speaking to Post's editor-in-chief Anthony Gould in an 'audience with' web interview, which appears on Post Online from today, Mark Chapman, managing director at Davies Group, said: "IT is a big issue for us but it needed to become more sophisticated, more flexible and more supportive of our professional staff."

Prior to joining Davies, Mr Lumsdon was at Hogg Robinson's Swiss subsidiary. He has over 10 years' frontline experience in senior finance and mergers and acquisitions.

Ms Postles, who joins Davies from National Savings and Investments, has been employed to establish a new HR strategy that will create the platform for Davies to deliver its ambitious growth plans.

Louise Meeson
Post Magazine
27th November 2008

Ant Gould, group editor in chief Post Magazine, talks to Mark Chapman, managing director of the Davies Group in the wake of its recent MBO.

 Watch the interview at:

http://www.postonline.co.uk/public/showPage.html?page=post_video_archive&f=2736

Underground movement

Gaining access to public sewers that are causing potential subsidence damage has traditionally been beset by red tape, but a new protocol could clean up the process, writes Jane Bernstein

If good things come to those who wait, then a new protocol - which has been six years in the making - should be very good indeed. The initiative addresses some crucial problems relating to public sewers and subsidence and has been agreed between Severn Trent Water and the insurance industry's own Subsidence Forum. Due to be launched next week on 21 October, the agreement aims to overcome challenges faced by loss adjusters investigating subsidence near public sewers (Post, 2 October, p10).

Defective sewers continue to cause subsidence problems for properties in the UK but attempting to investigate them has been a difficult and frustrating process. Where public sewers are maintained by the water companies, there has historically been no clear process for loss adjusters to follow in order to gain access or carry out repairs. The result has often been a stand-off that has delayed claims and frustrated customers.

Graeme Phipps, director of SP Property Services, has been a driving force behind the new protocol since work began on it in 2002. He explains: "The most significant problem was a lack of effective communication when it came to sewers that were implicated in a subsidence claim. Attempting to address the problems would normally involve numerous letters between the water companies and those working on behalf of the insurers in order to carry out investigations or repairs. Because there has been no defined point of contact or communication process, it has often been a case of waiting months rather than weeks to resolve the issue." Mr Phipps adds that there are also fundamental differences in the way the water companies and insurance industry classify damage and defects.

Long-awaited resolution

The new protocol, which has been agreed by Severn Trent Water and key members of the insurance industry, aims to provide some crucial solutions. The formation of the working party in 2002 to address the issues was widely welcomed and has had the full support of key bodies such as the Subsidence Forum and Drainage Forum. So why has it taken so long to come to fruition?

Richard Rollet, technical director of building services for Crawford & Company and a Subsidence Forum member, points to the inherent difficulties in galvanising all the diverse parties. "It's been about building bridges and trust between people who don't regularly talk to each other."

Nigel Barham, director of building services at GAB Robins UK and deputy chairman of the Subsidence Forum, adds: "This is the first formal agreement of its kind, involving a topic that has traditionally generated a degree of mistrust and misunderstanding between the parties concerned. It was important to overcome this and develop trust and co-operation."

Independent consultant Tony Boobier has been involved with the industry's discussion groups for subsidence and drainage since their outset and still sits on the latter. He observes: "The amount of effort it takes for organisations to work together, rather than against each other, shouldn't be underestimated. People are often defensive and suspicious. It is partly about building an environment of trust, then how best to translate that trust into practical benefit."

John Parvin, head of subsidence claims at Zurich and former chairman of the Subsidence Forum, however, does not believe it has been a question of the two parties failing to agree until now. He describes a more gradual process, in which informal arrangements were agreed in the interim, and says the current protocol formalises those agreements.

The question is - does the end result provide satisfactory solutions? Mr Phipps is enthusiastic: "We have agreed how we're going to talk to each other and the timescales within which we need to respond. We have also agreed on the quality of reporting - and, in particular, the information that should be sent to the water companies from day one." (see box, p25).

The consensus suggests this agreement is just the first step. Frazer Fletcher, chief engineer at Merlin Claims, explains: "It's a very good blueprint for the way forward, although it's obviously only between Severn Trent and the insurance industry for the moment. The protocol will need to be rolled out and other water companies will inevitably have different points of view."

Mr Parvin adds: "It should not be set in stone; this needs to be reviewed and the effectiveness measured. Fundamentally, what we've outlined works well but it's important there is a mechanism for reviewing it."

Flexible friends

Most certainly seem to agree a degree of flexibility will be vital and all parties must be prepared to review the protocol in the future. Iain MacLean, director of subsidence and surveying services at Davies Group, explains: "What we have is a reality check that reaches some middle ground between the issues of water authorities and loss adjusters. It should improve matters and be capable of being developed and expanded so that, in 10 years time, we've got a far better controlled and standardised system than we've had to date."

Gary Strong, director of practice standards and technical guidance at the Royal Institution of Chartered Surveyors, has been involved from the outset and was formerly subsidence and surveying services director at GAB Robins. He emphasises: "I would like to see other water authorities pilot this as soon as possible." Indeed, securing buy-in from other water authorities will be a key test of the protocol's success. And there is much optimism that this will be achieved. "Why wouldn't they get involved?" asks Mr Phipps. "It's all about simplifying the process and making it more efficient."

Inviting feedback

Severn Trent is also confident the pilot will be welcomed by other water companies. A spokesman confirms: "We have invited other water companies across the UK to the launch later this month and their feedback has been positive and enthusiastic."

It is equally important, of course, to secure the involvement of the wider loss adjusting and drainage communities. Julia Wilkinson, a partner at Plexus Law, points out that as with the recently launched Joint Mitigation Protocol for tree root removal (see p26), this latest agreement will not be legally binding. But it is hoped the benefits will speak for themselves. Ms Wilkinson points out that any protocol designed to implement co-operative working practices is likely - if embraced by the relevant parties - to reduce the costs associated with claims that could otherwise arise and become litigious.

Mr Boobier emphasises the tangible benefits to be gained from this particular protocol: "The key is to recognise the vast amount of energy spent in confrontation, and how process improvement translates into cost efficiencies and improvements in customer service. As organisations increasingly recognise the cost benefit, then they will be prepared to take the next step."

Furthermore, Sarah Dodd, associate at Eversheds and chair of the legal and recovery sub-committee of the Subsidence Forum, points out that while the protocol is not binding in law, compliance with it may serve as evidence of the reasonableness of a party's conduct in the event of a dispute.

Mr Rollet adds that loss adjusters will need to provide guidance and advice to their personnel on adhering to the protocol. Mr Fletcher agrees: "The people that attend the launch will need to take the issues back to their own companies, carry out some internal training and change their own processes. And the water authorities will have to do likewise."

According to Mr MacLean, the Davies Group has initiated relevant training in anticipation of the launch. It has also planned another two-day training seminar for the relevant staff at the beginning of December.

As far as raising awareness among loss adjusters is concerned, Mr Barham points out that the initiative is being spearheaded by the Subsidence Forum of which most loss adjusters involved with subsidence are members. "The forum also works closely with the Chartered Institute of Loss Adjusters' specialist interest group for subsidence. Details and protocols for usage are being briefed out via these two organisations. In fact, there was a briefing at the CILA SIG conference on 24 September and the Subsidence Forum is working jointly with Severn Trent on the official launch, which is taking place on 21 October."

It will also be vital to raise awareness among insurers. Mr Strong observes: "We need as many insurers as possible to endorse this, as they will in turn be the drivers for insisting their suppliers abide by it - that includes loss adjusters and drainage companies."

The advantages to be gained from the new initiative go beyond the stipulations of the protocol itself and there is a view that the process of achieving the agreement has helped create a greater understanding and better relationship between the parties involved.

Indeed, Mr Rollet identifies this dialogue as one of the initiative's key successes to date. The communications process set out in the protocol should do much to repair what has been a tense relationship between two very different industries. "It has been an issue that people have been passionate about," emphasises Mr Phipps, adding: "Where claims have been delayed, people have naturally been frustrated. What we are doing now is trying to take the agitation out of the equation."

Growing understanding

Severn Trent's spokesman emphasises that the protocol itself is evidence of a greater understanding, adding: "We hope that the launch of a new protocol will ensure this level of understanding is maintained."

As well as being welcomed by both the insurance industry and the water bodies, this protocol is also good news for claimants. "It's important to remember that we are dealing with people who are customers of both Severn Trent and the insurance company," explains Mr Phipps.

Teething troubles are bound to arise and require review once the pilot is up and running and Mr Boobier asserts: "The biggest issue will be that of interpretation of the protocol, but at the end of the day it is all about the spirit of working together." But those who began work on this project in 2002 feel their patience has been rewarded.

What has emerged is not just a list of agreed actions but a better working relationship between two diverse industries. Speed will now, however, be of the essence in securing the involvement of the wider water and insurance industries. As the spokesman for Severn Trent concludes: "We'd like both industries to adopt the protocol as soon as possible."

WHAT IS THE LEGAL STATUS OF DRAINS AND SEWERS?

According to Julia Wilkinson, partner at Plexus Law: "The law relating to drains and sewers is complex and distinctions need to be drawn between the two. Broadly speaking drains are not within public ownership whereas sewers may be. Under the Public Health Act 1936, most sewers then existing - those built before 1937 - became public sewers with effect from 1 October 1937 and the responsibility of the sewerage companies. These sewers are often located on private land and associated with subsidence claims but water companies are able to deny access to them by loss adjusters."

Sarah Dodd, associate at Eversheds law firm and chair of the legal and recovery sub-committee of the Subsidence Forum, adds: "Special provisions apply to public sewers under highways. The government has consulted on a proposal that sewerage undertakers adopt all private sewers connecting to a public sewer as a means of a resolving the many disputes that currently arise as to the legal status of sewers on private land."

SUBSIDENCE CLAIMS HANDLING PROTOCOL WITH SEVERN TRENT WATER

Graeme Phipps, director of SP Property Services, outlines key features of the new protocol:

"It's estimated that 10% to 15% of subsidence drainage claims involve dialogue with a water company (based on the number of Severn Trent enquiries and Association of British Insurers statistics). The protocol ensures agreed points of contact, timescales and working practices are followed, introduces accreditation guidelines for contractors and a generic framework for reporting.

The protocol will apply where subsidence has occurred within three metres of a public sewer and is subject to investigation by a loss adjuster or insurer. Its purpose is to:

- Ease communication between water companies, insurers and their representatives - via one contact point, for initial claims and supporting documents and a dedicated helpline, which can be used to check the potential presence of public sewers within a property.

- Speed up the claims process - via services standards. For example, Severn Trent will confirm the extent of any public sewers within a property by 10 working days, and confirm the extent of repair work to be undertaken 10 days after that. Repairs, where accepted, will be undertaken within 35 days, following confirmation that the affected pipe is a public sewer.

- Improve the information flow - via an agreed checklist, giving guidelines for the level of information required from the loss adjuster or engineer.

- Reduce health and safety risks - via acceptance that drainage investigations can only be undertaken by Water Research Centre accredited contractors and drainage surveys will be carried out using water industry classification scorings, grades one to five (one being negligible damage, five being the most severe).

- Remove claim disputes - via an agreement that in certain situations repairs can be undertaken and funded by the insurer (dependent on classification scoring).

The protocol is being launched at Severn Trent's Cropston Visitor Centre in Leicestershire on Tuesday 21 October."

Sandra is a qualified HR professional with over 15 years of senior HR management and consultancy experience. In the past she has worked for a number of financial and professional services organisations including PKF and Cunningham Lyndsey.

Her most recent role was as HR Director for NS&I for six years. She was also a member of the Executive Board and made a significant contribution to business success by building HR capability and successfully steering the organisation through significant change whilst winning a number of awards along the way.

At the Davies Group, Sandra will be working alongside the new senior team and applying her considerable experience to establishing and implementing a Group HR strategy that will help Davies achieve its ambitious growth plans.

11th June 2008 saw the Davies Group annual golf day, which took place at Brookman’s Park Golf Club, Hertfordshire.

The winners of the various competitions were as follows:-

Team Competition: David Greenwood (Davies), Tim Woodford (Prestige), Graham Kitteridge (Ocaso), Chris Chegwidden (Corporation of London)

Individual Competition – Under 20 Handicap
1st - Graham Kitteridge (Ocaso)
2nd - Neil Gurney (Stonebridge)
3rd - Alan Ellis (NFU)

Individual Competition – Over 20 Handicap
1st - John Cowell (Oxygen)
2nd - Sandra Cowan (Contractsure)
3rd - Darren Wagland (Canopius)

Nearest the Pin: David Hallett (Home & Legacy)
Longest Drive: Paul Taylor (Davies Notts)
Davies Shield: Simon Tipple (Davies IT)

See photos from the Davies Golf Day

Iain Maclean has been appointed to the Operations Board as Director of Project Managed Subsidence Services.

After 17 years in construction,  Iain joined Davies in November 2006 with a remit of developing a quality driven, cost-effective project managed subsidence claims handling product from scratch - launched in June 2007 and have more than doubled Davies ' market share of the subsidence claims handling market since launch - actively involved in a number of new initiatives, including digital remote monitoring and also sits on the Executive Committee of The Subsidence Forum - Manages the expanding internal and external subsidence staff from the Davies Subsidence Administration Unit in Stoke on Trent.

Nick Gazzard has been appointed as an Associate Director reporting to the Operations Board.

Nick is responsible for Davies corporate governance operation,  internal control, and for establishing and maintaining systems and procedures to ensure Davies Group companies comply with FSA regulation and statute law. For ensuring Davies maintains a proper system of internal control to safeguard shareholder and stakeholder interests through the application of Davies accountability strategy and internal audit program.

The Davies Group was selected as a winner from the 180 plus exhibitors as the best stand design for a small space at BIBA 2008. The project manager Paula Doolan, worked with the designers JET and Co to bring together the key facts of Davies celebrating their fortieth year in business along with the conference theme of Influencing Tomorrow.

The resulting design and stand theme was a ‘timeline’ that graphically depicted the changes in life through culture, fashion, architecture, products and pivotal insurance events. The montage of over 200 images also played a part in the stand competition with 10 trivia questions about iconic and key insurance events over that period. The correct winners were selected each hour and then drawn to receive a bottle of Champagne.

Paula Doolan said “I wanted a stand that didn’t just repeat the same look and message that I knew other exhibitors would also be saying. I wanted something that would be memorable, engaging and fun. Without a doubt our stand achieved just that. Word quickly spread about our Trivia quiz and people couldn’t resist taking part. We made an incredible number of new contacts.”

JET and Co, the Designers, have worked with the Davies Group in repositioning the brand since their recent MBO. This has included the look for the logo, its website, sales material and finally culminating in the stand design at BIBA. The visual impact, clean lines and ‘wow’ factor were selected by the BIBA adjudicators as the best in show.

Following its recent MBO, leading loss adjuster Davies Group will be having its first public outing under the all blue Davies banner and will be marking the occasion by featuring a timeline on its stand.

In keeping with the conference theme of ‘Influencing Tomorrow’, the stand will look at what the future may have in store as well as reflect on the history of Davies since the 1960s and highlight social, economic and insurance linked events from the period.  It will also be running a quiz throughout the conference with a bottle of champagne to be won every hour.

Mark Chapman, new managing director of Davies Group will be attending the event on Thursday 1 May and will be available for informal meetings throughout the day.

On the stand throughout the conference, will be:

Gary Liptrot - Director Business Development
Darren Coombes - Director Business Development
David Mansfield - Director Lloyd's & London market
Paula Doolan - Director DMS
Cris Bellamy - Group Business Development

Insurance Times interview with Mark Chapman
By Sarah Kennedy

After a successful MBO at Davies Group, Mark Chapman tells Sarah Kennedy how he plans to challenge the market leaders.

Following months of speculation, loss adjuster Davies completed a £27m management buy-out (MBO) earlier this month that toppled its partnership structure and fuelled the company’s goals for significant growth and modernisation.

In his first interview since becoming managing director of Davies, Mark Chapman says that due to the backing of private equity firm LDC, the company will now seek acquisition targets and organic growth opportunities to meet its goal of surpassing powerhouse Crawford as the second largest loss adjuster in the UK.

It’s difficult to imagine that something as potentially explosive as an MBO, resulting in the dissolution of a 39-year partnership, could come off smoothly without a clash of egos in the existing structure.

But Chapman says that is exactly what happened when key members of Davies decided that in order to grow and compete against market leaders Crawford & Co and Cunningham Lindsey, which have been pushing into new markets and investing heavily in technology, the business’s old-fashioned structure would have to be replaced.

There were real issues that confronted us,” says Chapman. “One was about succession. Some of the partners were getting older and there hadn’t been a lot of movement in senior management, and we wanted to freshen up the gene pool.

“The second issue was the funding of the business. All major developments were funded by the partners. It didn’t make sense in the modern world for a business like ours to be funded that way. There was concern that some of the guys were getting older and may be less eager to invest in an area that they would never see a return on.”

That scenario never played out, but Chapman says it was at the back of peoples’ minds and a potential obstruction to Davies’s development.

Although the old structure operated in a very amiable and successful way, it was at times speckled with confusion and not always clear who was responsible for what, he says. The company, for example, did not have a finance director, with most of those responsibilities falling into the lap of senior partner David Ede.

An MBO gives more clearly-defined roles to the former partners, many of whom had been with the company for over 30 years. And surprisingly there was no battling for the top spot.

Chapman, who joined the company in 1973 and rose to become deputy senior partner says it was always understood when Davies underwent the MBO, he would become managing director, while Ede, who led the company for 39 years, would step aside.

Partners Adrian Palmer, Les Wright and Darren Coombes have joined Chapman on the executive team. Two partners will leave the company and another two will remain as consultants. “There has been some reshuffling but we’ve maintained goodwill,” says Chapman. “This is all very exciting. It’s what I’ve always wanted.”

Chapman’s glee and energy over the new role is palpable. He is eager to take Davies through an ambitious growth plan, while maintaining the culture that its clients have come to respect.

“We will continue to be heavily focused on adjusting but we want to add on some more ancillary areas,” he says. “With this access to corporate funding we want to develop new products. Our investors are keen to see this business develop.”

The key focus for Chapman is growth. He says he wants to see the current turnover of £25m double over the next three years and to eventually replace Crawford and Company as the second largest loss adjuster in the country.

He says: “The business will grow organically, but when opportunities present themselves, we will seek strategic acquisitions.”

Chapman says Davies will be looking to acquire other adjusters that can help the company gain strength in key areas. An MBO is a somewhat rare move in the loss adjusting market which has so far avoided the consolidation frenzy that seems to have captivated other areas of the insurance industry. With the exception of AMG’s acquisition of Carr Greenwood Smith and Sigma there has been little activity of adjusters buying adjusters.

“I don’t see massive amounts of real consolidation starting to take place in the market, but we may see more joining-up of niche areas,” says Chapman.

But Davies is willing to become a sort of trail-blazer in that regard, if the opportunity and the price were right.

“In order to be a top player, we need to offer a broad range of services. Our goal is to become a much more prominent player in the market than we are today. I would be very disappointed if we weren’t double the size in the next three years.

He concludes: “This is a fantastic thing for this company, it really needed it.” IT will continue to be heavily focused on adjusting but we want to add on some more ancillary areas,” he said. “With this access to corporate funding we want to develop new products. Our investors are keen to see this business develop.”

The key focus for Chapman is growth. He said he wants to see the current turnover of £25m double over the next three years and to eventually replace Crawford as the second largest loss adjuster in the country.

He says: “The business will grow organically but when opportunities present themselves, we will seek strategic acquisitions.”

Chapman says Davies will be looking to acquire other adjusters that can help the company gain strength in key areas. It is a somewhat rare move in the loss adjusting market that has so far avoided the consolidation frenzy that has captivated other areas of the insurance industry. With the exception of AMG’s acquisition of Carr Greenwood Smith and Sigma there has been little activity of adjusters buying adjusters.

“I don’t see massive amounts of real consolidation starting to take place in the market but we may see more joining up of niche areas,” says Chapman.

But Davies is willing to become somewhat of a trail blazer in that regard, if the opportunity and the price are right.

“In order to be a top player, we need to offer a broad range of services. Our goal is to become a much more prominent player in the market than we are today. I would be very disappointed if we weren’t double the size in the next three years.

He concludes: “This is a fantastic thing for this company, it really needed it.”

Reproduced by kind permission of Insurance Times.

Under the terms of the deal announced today and led by existing key management, Davies Chartered Loss Adjusters LLP (DCLA) will cease to trade, being replaced by Davies Group Limited. The buyout also provides an exit for a number of the firm’s partners, including senior partner David Ede who will retire soon after the transaction following 39 years’ service.

Davies Group’s management team will be led by new managing director Mark Chapman, formerly deputy senior partner at DCLA. He will be supported by other key DCLA managers including Adrian Palmer, Les Wright, and Darren Coombes. In addition, Mark Molyneux, a former managing partner at Ernst & Young, will join the team as chairman.

The buyout has been backed by private equity firm LDC, which is taking a majority shareholding. Ongoing management will retain a substantial stake in the business. Commenting on the changes, new managing director Mark Chapman said:

“The DCLA partnership has evolved successfully over the last 40 years to become one of the leading players in the UK insurance market, but we felt the time was ripe for the next stage in that evolution. This deal represents that next stage; it will lead to a reinvigorated Davies Group able to grow and develop in line with our customers’ needs."

“By introducing a new corporate structure we are bringing a fresh ethos and commercial drive to the firm which will provide the opportunity to continue building on our recent growth."

“In LDC we’ve secured a supportive investor with a long, successful track record of working closely with management teams to take businesses to the next level of success.”

Following the buyout, management and LDC will focus on the development of new specialist products and services that respond to the changing needs of Davies’ clients and the wider insurance industry.

Established in 1968, Davies employs over 400 people and delivers a comprehensive range of claims and fulfillment services through a network of 33 regional offices. The business is headquartered in West London.

In addition to the core adjusting of property claims, the £25 million turnover company has a number of specialist loss adjusting divisions which handle complex claims such as subsidence, liability, construction and engineering and major loss. Davies is also able to provide assistance in fulfilling claims through its contractor and disaster restoration networks.