Going out to the market with news of an acquisition is akin to announcing an engagement, says Toby MacLachlan (pictured), MD of Ignite Systems, which was recently acquired by Sequel (a Verisk business). It takes a lot of planning and it’s a secret for a while, and then when you do get to make the announcement, it’s so rewarding to hear congratulations and best wishes for the next step that you’re taking.
But also, much like an engagement, an acquisition is not just about the moment itself but rather the journey that it represents, and that’s the bit that MacLachlan and his team are the most excited about. The Sequel deal represents the next chapter in the life of the business, which started as a few people around a kitchen table plotting how to build out a unique system, and now sees those people joining up with a multi-billion-dollar corporation with well over 9,000 employees worldwide.
The time was right for the partnership, he said, because Ignite had been winning a number of tenders in the personal lines space and building relationships with brokers of significant size. Then the firm ended up competing in tenders from some of the UK’s top 10 brokers and received invaluable feedback from these businesses – that while Ignite’s technology, team and roadmap came out trumps, its backing was too weak compared with major competitors.
“So, Ignite’s management team, myself included, just sat down and said, ‘Well, this is a problem we can’t solve overnight organically,” he said. “It would take a long time to do that so we set out to find a parent company that would allow us to focus on what we’re good at – technology and client relationships – but which would also provide the infrastructure around that which would help us win tenders and give confidence in our longevity to the people we would provide systems for.”
From the very first meeting with the Sequel team, MacLachlan noted that there was a meeting of minds as Sequel evidently had significant market expertise, as well as the experience of building themselves up from a handful of staff to the business they are today.
“They’ve been through that process,” he said. “They know what works, what doesn’t work, they’re very familiar with our technology stack. And we know they’re a team of really bright people who share our ambition for this space. They want to create a connected ecosystem of insurance products spanning all the way from the global complex commercial reinsurance things that they do, through to the high volume, low touch personal line stuff that we do at the other end of the spectrum.
“… I think we just ticked that box for them in wanting to [fulfil] that part of the ecosystem. And they’re quite ambitious for us. They share our belief that we will be able to challenge the legacy systems within the market we operate in over the next couple of years, with their backing. They’ve got terrific connections with insurers and MGAs, in fact, I think they supply systems to four of the five largest MGAs and eight of the 10 largest brokers in the world. There has not really been a proper new entrant into personal lines policy administration in the last 20 years, so we all felt the market conditions are really right for this.”
And though it’s still early doors for the join-up, MacLachlan highlighted that the shared cultural values and ethos between the firms was apparent even from the earliest conversations. Ignite is passionate about retaining its identity, and thus appreciated Sequel’s way of doing business – letting people do what they do best. They appreciate that when a company works well and its culture is strong, the best thing to do is not to interfere but rather to encourage that, he said, and to support it by any means necessary – and it’s an approach that has worked very well so far.
Looking to the next steps, MacLachlan stated that for the next six to 12 months the focus will be on Ignite’s upcoming partnerships. The firm will be announcing deals both with those top 50 brokers that it has signed up recently, as well as new insurer relationships. Leveraging momentum is the name of the game for Ignite now, he said, as the team is seeing a real acceleration in the demand for its services, as more large-scale brokers are choosing Ignite.
“We’re not a peripheral specialist player anymore,” he said, “we’re being chosen by big mainstream brokers. And the types of insurers that we’re getting on board now and going live with are the big players in the market. Those two things combined make us a real force in the personal lines and SME arena. And we know that in order to stay ahead and to maintain the technical supremacy and good reputation that we have, we need to carry on with our research and development.
“That’s one thing that hasn’t changed - we’re scaling up the team, we’re adding a lot more resources to it. That’s so that as those contracts continue coming in, we can not only deliver them but also keep pace with the level of research and development that we’ve enjoyed to date. We spend about 30 to 35% of our time on research and development in any given year and we are looking to increase that percentage and not decrease it as we grow.”
