Filhet-Allard

Filhet-Allard is one of the leading French brokers that specialises in business insurance and employee benefits. It is currently ranked seventh largest in France by turnover and manages in excess of E1bn in premiums for its clients. The firm hopes to move up to sixth place this year in what is the world’s fifth largest economy, just ahead of the UK, based on International Monetary Fund statistics for 2014.

This hoped-for rise up the French insurance broking league table will be achieved because Filhet-Allard is one of the fastest-growing brokers in the market. The Bordeaux-based firm reported organic growth in revenues of over 5% in 2013 and 8% in 2014. This growth has been managed in a French economy that still struggles to recover from the effects of the credit crisis and ensuing global economic turndown.

This is compounded by a corporate insurance market that remains fiercely competitive on the back of record levels of capacity that is mainly supplied by capital markets (hedge funds, pension funds and the like) in search of elusive returns in the global reinsurance market.

In such a tough market brokers and insurers need to focus on core competencies that enable them to deliver superior service to customers, retain the best customers and win new ones from rival firms.

Brokers such as Filhet-Allard need to leverage their buying power with insurance companies to obtain the best terms and conditions for customers. They also need to continue to invest in skills, market knowledge and legal competences, develop sophisticated computing tools and, critically, build an international presence to deliver cross-border solutions for their expanding customers.

Filhet-Allard is well aware of these needs and has risen to the challenges presented to deliver a very solid basis for continued growth, despite the difficult trading conditions.

One of the key foundation stones of this strategy is Filhet-Allard’s membership of Brokerslink, a global broking organisation, for which the firm is the representative for France and Ivory Coast.

The French broker joined Brokerslink in 2011 after it acquired D&P based in Lyon, the former French member of the network. This acquisition gave Filhet-Allard an important presence in the second most important economic region of France and further skills in key sectors such as real estate.

But, more importantly it meant that the broker became a member of Brokerslink that enables it to deliver the sophisticated risk and insurance management services wherever they need them (see panel on international expansion).

The company was created in 1895 in Bordeaux and, at that time, focused exclusively on marine and cargo insurance. A significant part of Bordeaux’s economy was linked to its harbour that was the main hub for shipments to and from French West Africa.

Over the 20th century Bordeaux’s harbour activities declined. This, coupled with the deregulation of the marine and cargo insurance business in France and worldwide, persuaded Jacques and Patrick Allard to expand and diversify the business to rise to the challenges and opportunities presented by the new economic order.

The first really big step in this process was the decision to buy Filhet company, a broker that specialised in the business risk sector. Following this acquisition, the company took the new name of Filhet-Allard.

When current chairman Franck Allard joined the company in the 1970’s, it had only 15 employees. Today, alongside his brother, cousin, and son Grégory (Filhert-Allard's President – Corporate Risks), Franck Allard heads a group with 950 employees that operates in the main cities of France and also abroad in Spain, Switzerland, Ivory Coast and more recently in Latin America, in Buenos Aires, Argentina.

Through its subsidiary AMV, Filhet-Allard is one of the main French insurance brokers for affinity insurance programmes in the business to consumer and business-to-business sectors. This is also a strong business line for the Spanish operation.

Under Franck Allard’s leadership, Filhet-Allard’s strategy has been to answer all businesses’ insurance needs. The firm’s clients are able to access a ‘one-stop shop’  in which specialist teams support businesses according to   their   needs   and   design   tailor-made   insurance solutions  in  property  &  casualty  (P&C),  employee benefits,  marine  and  cargo,  credit  and  factoring, affinity programmes and risk management. It thereby becomes its clients’ risk manager or their outsourced department.

Grégory Allard explained the strategy. "There are no strict guidelines on the size of the businesses that we work with by premium volumes but generally speaking these are companies that do not have a dedicated risk manager or insurance department. We are effectively their outsourced risk management and insurance department.

"These companies tend to have revenues of between E100m to E1bn and 500 to 10,000 employees. We do also work with the biggest companies such as in the power and utilities industry because we have specialist skills such as in renewable energy. But generally our strategy is to work with upper middle market companies and be a one stop shop for their insurance needs offering property and casualty insurance, employee benefits, credit and surety and marine insurance.”

This is also now supported by dedicated risk management services such as risk engineering”, explained Grégory Allard. "We have a subsidiary called PRAEVENTIA that is a risk engineering service. We have five full time risk engineers. That is pretty sizeable compared to the competition. We certainly have one of the largest teams of specialist risk engineers in the French broking market and we can address the risk management concerns of our customers,” he said.

As noted above, the highly competitive and increasingly complex and global modern economy means that insurance brokers can no longer survive through personal contacts with customers and the generation of commissions through simple insurance placement.

Insurance brokers that strive to prosper and grow must possess a high level of expertise and skills to help meet their customer’s complex risk management and transfer requirements.

Filhet-Allard is well aware of this need and states that it thus aims to provide its clients with the ‘best quality service’ and ‘high-added-value advice’ that is rooted in the ‘sound professionalism’ of its staff. "All sales account managers are graduates and have broad-based insurance skills and a deep understanding of insurance programmes, enabling them to fully understand businesses and their environment and build the tailor-made business insurance solutions that they need,” explained Grégory Allard.

Another key strength of Filhet-Allard is its independence, a quality that guarantees integrity and the ability to deliver the best solution possible for the customer.

Filhet-Allard is proud to remain a 100% family-owned company that gives it complete control over its corporate strategy. "Independence guarantees the impartiality of the choices it [Filhet-Allard] makes for clients and ensures all the flexibility needed to deliver tailor-made solutions which meet [the customer’s] needs”, states the company. Scale is another key strength in the modern corporate insurance market as brokers negotiate with global insurance companies that manage billions of Euros of premiums a year.

Filhet-Allard’s strong position in the French market means that its clients benefit from its negotiating and buying power with the main insurance companies.

Technology is also increasingly important in today’s corporate insurance market, particularly as more and more companies expand internationally in search of growth. Customers expect their brokers and insurers to deliver IT-based reporting tools that provide transparency and enable them to monitor the performance and progress of their insurance programmes.

Filhet-Allard has therefore committed to invest over 10% of its annual revenues over a period of 5 years to improve and adapt its IT system to the new web-based business environment. Grégory Allard explained that the broker is currently working on the launch of a new website that includes a critical element for clients among its increasingly international customer base ‘Insuraccess’ is a reporting tool designed to meet the information needs of customers with international programmes. The system has been developed by Brokerslink Specialised Resource member WEBCBG, the New York-based technology firm.

"The tool can be used by clients, brokers and servicing brokers worldwide who need real-time access to inception data, renewal data and the like,” explained Grégory Allard.

The addition of a claims tracking capability, also designed by New York based technology firm WEBCGB and called MAPTYCS, is the next step said Grégory Allard. But this is not a simple task, he explained.

"Every broker has a different system in place. Even global brokers have different systems in place in different countries and regions because they were created through mergers and acquisitions. But we have made a start and are making progress,” continued Grégory Allard.

Filhet-Allard’s commitment to investment in the latest technology is another example of how the French broker has evolved and adapted over its 120-year history and been able to continue to grow and prosper against the backdrop of major economic, political and social change.

This investment in the future coupled with its membership of Brokerslink should enable it to continue its impressive growth path and continue to prosper in the fast-changing global economy of the 21st century.

Filhet-Allard has enjoyed consistent growth over the past 10 years and is confident of achieving organic growth of about 8-9% in 2014 and again this year. Throughout its history the group has always sought out external growth through acquisitions and partnerships whenever they created positive synergies and a cultural fit.

Experts agree that in order to survive and prosper in the modern, global economy, insurance brokers need to specialise. They need to invest in people, skills and resources that enable them to meet the ever-more specialist and complex needs of their customers.

For this reason Filhet-Allard has become what it describes as a ‘multi-specialist’ insurance broking firm that can offer its customers the level of knowledge and expertise needed to design and deliver the tailor-made risk and insurance management solutions that they demand. "Filhet-Allard is a multispecialist able to answer the needs of all sectors in France. It has also been able to develop unique know-how in sectors with high added value,” explained group chairman Franck Allard, the fourth generation Allard to lead the group.

One key specialism of Filhet-Allard is in marine insurance. This was the original business of the broker. This line of business is currently operated by means of a dedicated subsidiary called Filhet-Allard Maritime (FAM), led and managed by President Henry Allard.

FAM’s slogan – ‘In the heart of the international trade’ – conveys its vision to contribute to the success of the international trade and shipping operations, with the support of 80 collaborators all over the world, notably based in Bordeaux, Geneva, Abidjan, Angola and Asia.

The company operates in the major global shipping and commodities markets and is the world’s biggest broker of insurance for the cocoa and coffee markets.

 It was originally started in 1895 as Sworn Marine Insurance Broker and, since then, has always focused on the marine cargo and hull lines, particularly in Africa that has always been a key market for FAM.

FAM has been the marine insurance broker for UNILEVER Group for decades throughout West Africa. The commodities business is operated through another specialist subsidiary brokerage based in Geneva, Switzerland – Assurances Filhet-Allard Maritime Geneva.

Geneva is one of the centres of the global commodities trading market and, despite the growth of newer markets such as Dubai, remains the second biggest commodities trading centre in the world.

Henry Allard explained the significance of this business and its positive role in the group’s growth path. "We have a license in the Ivory Coast that dominates the global cocoa production market. Our brokerage there started as a marine broker. Bordeaux was historically the main port for West African trade and Filhet-Allard is the biggest insurance broker for the cocoa market,” he explained. "We handle about 60% of the total volume of Cocoa premiums in the world and are the broker of the Geneva Cocoa Exchange. Our focus on skills, tailor-made solutions and specialist markets such as commodities and renewable energy has enabled us to report great growth”, added Henry Allard.

Filhet-Allard is also reinforcing its position in the real estate insurance market that came along with the acquisition of Lyon-based D&P in 2011. "This strategy bore fruit. Our real estate division will achieve EUR 7M commissions in 2015 and we have now over 19 million square meters of real estate insured across France,” explained Grégory Allard.

Franck Allard also said that Filhet-Allard has great expectations for the employee health insurance market and has a target to cover one million employees against 330,000 today.

Another important specialism and growth area is renewable energies in which the broker has been involved since 2004 and is now one of the leading brokers in France in this fast-growing market.

Filhet-Allard has a dedicated team of 12 people who design insurance programmes for wind, solar, biomass and biogas energy risks. It is thought that the broker has a market share of more than 25%. It was also the first insurance broker to implement performance warranty insurance on solar panels, in cooperation with Munich Re.

Aviation is another field of expertise for Filhet-Allard. This is now the biggest employer in the South West of France and especially in Toulouse, where the main Airbus airplane assembly factory is located. Filhet-Allard advises a large number of   aeronautics   subcontractors   and engineering companies that deliver services and products to Airbus.

In early 2014, its expertise allowed the Group to win the liability insurance programme of the French Airport Union that consists of 136 airports in France and overseas. The message is clear – specialism pays.

Brokerslink delivers global footprint critical for expanding customer base and remaining independent.

The majority of Filhet-Allard’s corporate customers are medium-sized national companies that are currently seeking growth in faster expanding territories worldwide as European economies continue to struggle.

The broker quickly identified the need to follow its customers abroad and serve their risk and insurance management needs wherever they required. Not only that, this service should be provided in a consistent manner and to the same level of service quality that they receive at home.

As noted in the main profile this is greatly assisted by the Filhet-Allard’s existing subsidiary operations in Switzerland, Spain and the Ivory Coast that it has built over time.

The Abidjan office in the Ivory Coast was only set up a few months ago after the broker received a license form the local insurance supervisor. Filhet-Allard has been active in the sub-Saharan African market through its marine and cargo insurance operations for a long time. And the creation of the Ivory Coast operation will considerably consolidate its position and help it develop property & casualty as well as employee benefits insurance in the region.

But Franck Allard and his son Grégory, who worked as an investment banker in New York before returning to France to head the corporate insurance arm of the brokerage, realized that this was not enough in the modern global economy.

The company therefore created its own network but realised that this was not enough. Filhet-Allard needed to team up with a bigger network of similarly independent brokers that could offer the same breadth and depth of service that it offered its customers in France.

By chance Grégory Allard met José Manuel da Fonseca, head of MDS Group and Brokerslink, at a conference in New York, midway through the first decade of this century. The two hit it off on a personal and business level and a lengthy ‘courtship’ began.

Mr Fonseca realized that the fast-growing network he led needed a stronger presence in France and Filhet-Allard, with its family ownership and focus on traditional values such as customer service, fitted the bill perfectly.

The courtship could not transform into marriage and Filhet-Allard join the network, however, because Brokerslink only has one member per nation and it already had a French representative in D&P in Lyon.

But finally in 2011 the door opened for Filhet-Allard to join Brokerslink as they decided to acquire D&P. This was a big step forward for the fast-growing French brokerage and also for Brokerslink as it now boasted a serious presence in one of the world’s biggest economies that was made all the more positive because of its historic international business links, particularly in West Africa. Grégory Allard explained the significance of the move as he said:

"This participation allows us to provide our clients with the best solutions and to play in the ‘Champions league’ along with our leading competitors. Membership of Brokerslink gives us the capacity to design a complete range of global insurance solutions that we coordinate and handle through our local partners. It also gives access to specialised resources in reinsurance, captive management, risk management and modeling”.

 The management of Filhet-Allard is acutely aware of the need for independent brokers to ‘join the 21st century’ and offer the same range and level of services, not least technology based, as the leading listed global brokers.

The incorporation of Brokerslink so that members can become shareholders and provide the central funding and resources needed to deliver such services is a big move forward in Grégory Allard’s view. "New perspectives and opportunities will open up because of this innovative business model. Brokerslink will be able to implement additional resources in line with the ambitions of its shareholders,” explained Mr Allard who very much looks forward to the next chapter in the history of Filhet-Allard and of Brokerslink.