Entrevista a José Manuel Dias da Fonseca, CEO da Brokerslink e do grupo MDS, publicada no Insurance Day

1. BIG INTERVIEW
www.insuranceday.com | Wednesday 1 March 20174 www.insuranceday.com | Wednesday 1 March 2017 5
A capital
network
The recent stock offering represents
a significant change to Brokerslink’s
business model, but co-operation
among its members very much
remains at the core of the new
company, its chief executive says
B
roker network Brokers­
link has undergone quite
a transformation over
the past three years.
According to the company’s
chief executive, José Manuel Fon­
seca, its evolution from a network
of insurance brokers operating
in more than 90 countries into
a profit-focused, global broking
company headquartered in Swit­
zerland was a direct response to
the increasing competition and
consolidation in the internation­
al insurance broking sector.
But for Fonseca, who is also
the chief executive of MDS, the
largest insurance broker in Por­
tugal and the fourth-largest bro­
ker in Brazil (after Aon, Marsh
and Willis), there have not been
many opportunities to sit down
and reflect since Brokerslink’s
private stock offering in October
last year.
The new company, he says, has
been actively engaged in all of the
activities associated with a recent­
ly incorporated enterprise. This
includes consolidating its new
business model and capitalising
on what it achieved last year.
“We are also in the process of
investing the capital we raised
in October in key areas of the
business: in IT, in our centralised
business platform, in recruiting
new people and in making our
clients and the global insurance
and reinsurance communities
aware of the new developments
around Brokerslink,” he says.
Brokerslink’s multinational
board of directors had its first
meeting in London in January
at the offices of broking group
Ed, a Brokerslink partner. A key
focus for the company in the year
ahead is broadening its presence
on the African continent.
“We have got quite a few gaps
in our network on the African
continent,” Fonseca says. “There
are around 55 countries in Africa
and we are currently present in
about 15 of them. This compares
with the Middle East, where we
are present in all of the markets.
So, in terms of our expansion
over the next year or two, we
need to make progress in Africa.”
The company is currently
present in 100 countries across
Europe, North America, Latin
America, Asia-Pacific, the Middle
East and Africa.
Expansion plans
Brokerslink is also in the process
of developing what Fonseca de­
scribes as an “aggressive” busi­
ness plan. The main focus of the
plan in 2017, he says, is to bring
Brokerslink closer to the corpo­
rate risk management and re/
insurance communities, in a way
it has not been previously.
“At the same time, we will
continue to expand our network
of brokers and insurance ser­
vices companies. We will work
together with our partners and
our members to complete the
transformation of Brokerslink,”
Fonseca says.
Before the process, which be­
gan in October 2014 with the
creation of a holding company,
Brokerslink was a formal as­
sociation of broking, risk con­
sulting and insurance services
companies based around the
José
Manuel
Dias da
Fonseca CV
José Manuel Dias da
Fonseca is chief executive of
BrokersLink. He is also chief
executive of MDS, the biggest
insurance broker in Portugal.
He is chairman of Apogeris,
the Portuguese risk managers’
association. He was also
the vice -president of the
Federation of European Risk
Management Associations for
several years.
Before joining MDS, he
played an important role in
introducing bancassurance
products into the Portuguese
market. He also founded a
pension fund management
firm and was president of a
Portuguese insurer.
world. Although Brokerslink’s
70 or so member companies
controlled combined annual
premiums and consulting fees of
more than $15bn by 2014, there
was no room for complacency,
Fonseca says.
Indeed, the decision to set up
Brokerslink as a corporation had
been formally approved a year
earlier at the network’s annual
conference in Singapore.
“It was clear to us that, as an
organisation, we needed to be
more than just a defensive net­
work which existed to protect its
members’ business interests, ex­
tend their geographic reach or to
help them provide a certain level
of service to their clients,” he says.
The holding company, Brokers­
link Management AG, represent­
ed a very different vision and
business model for the network
and its members, Fonseca says.
The company was initially capi­
talised with $500,000 provided by
five board members: MDS of Por­
tugal, Crystal & Company of the
US, Filhet-Allard of France, Nova
of China and Cooper Gay Swett &
Crawford (now Ed) of the UK.
“We wanted a structure that
would allow Brokerslink to orga­
nise and resource itself in such
way that would enable our mem­
bers to be more proactive and dy­
namic in terms of accessing and
competing against other brokers
Rasaad Jamie
Global markets editor
for new business and to recruit
new talent. In the current envi­
ronment, no broker can afford to
sit around and wait for business
or talent to walk through the
door,” he says.
Brokerslink further strength­
ened its financial position in
October last year through an of­
fering of stock to members in an
operational company, Brokers­
link AG, a process which in­
creased the size of the company’s
investor base to 55 shareholders
from 40 countries.
Financial resources
The new corporate structure and
Brokerslink’s enhanced finan­
cial resources means it is now
in a position to take minority
stakes in member companies
and provide them with financial
and other support to maintain
their independence in the mar­
ket and thereby “helping them
to win new business by demon­
strating their unique skills to their
clients and to the global insur­
ance market”.
Brokerslink, Fonseca says,
is no longer a network but a
company that, among other
things, owns and manages a
network. “We have changed
the Brokerslink business model
from one where a group of
friends did business together to
one where these friends have
become more than just friends.
They became investors and
shareholders in this big global
broking company,” he says.
“This has created a much
greater sense of alignment and
motivation among our members.
Because when you’re a share­
holder in something, your mind­
set changes.”
Fonseca adds: “For a number of
new shareholders, this is the first
time they have made such an in­
vestment. But the new structure
means they have an active in­
volvement in the development
and growth of Brokerslink, as
well as unique access to global
business opportunities.”
This is because, he says, despite
all the recent changes, co-opera­
tion among Brokerlink’s member
companies very much remains
at the core of the company. The
idea, according to Fonseca, is
to put smaller brokers that are
members of Brokerslink in a po­
sition to go after bigger or inter­
national clients, or after certain
types of business they could not
have previously acquired or ser­
viced on a standalone basis.
The increase in Brokerslink’s
capital and shareholder base
will drive the expansion of
Brokerslink’s client support ser­
vices capabilities.
The new corporate structure
will enable Brokerslink to gener­
ate revenue from international
business and to invest in a much
more focused way in its cen­
tralised members’ support ser­
vices platform.
The idea behind the platform
is for member companies to have
access to management, product
line, business development, mar­
keting and branding resources
and services, anywhere in the
world. “We can make software
tools available to our members
to enable them to manage inter­
national accounts and/or to or­
ganise information for clients in
different countries or markets,”
Fonseca says.
In terms of forward planning,
Fonseca does not envisage a
huge Brokerslink central ser­
vices team. What is important,
he says, is for Brokerslink to un­
derstand where the skills and the
expertise inside the network are
located and how best they can
be leveraged for the benefit of
every member.
Here, he cites the example of
Brokerslink’s construction team
(which is composed of specialty
lines brokers from other mem­
ber companies which have very
strong construction practices),
Second fundraising planned
At present Brokerslink has two
kinds of members. These are
partners (which are also share­
holders in the company) and
affiliates (which are not – as yet
– shareholders). José Manuel
Fonseca points out it is not man­
datory for affiliates to invest in
the company.
“When we organised our stock
offering, one of the criteria was
that we did not allow anyone
with less than 18 months of mem­
bership to invest,” he says. “We
thought a period of 18 months
was sufficient for a member to
know whether they really wanted
to be part of our network.”
But many members without
18 months of membership want­
ed to invest and Brokerslink is
now in the process of organising
a second round of fundraising in
early 2018 to allow other affiliates
to invest and become partners in
the network. “Some of those who
have already invested might in­
vest again,” Fonseca says.
At the private stock offering
in October 2015, no member
was allowed to invest more than
SFr100,000 ($99,696) to ensure a
broad investor base. The offering
was priced at SFr5,000 a share,
with every eligible member enti­
tled to purchase up to 20 shares.
“Without that limit, we could
have raised much more capital,”
Fonseca says.
According to Fonseca, Brokers­
link is approached by brokers
that want to join the network al­
most on a daily basis. The prob­
lem, he says, is Brokerslink has to
say no to most of these applica­
tions. This is, typically, because it
already has a partner or an affili­
ate in that particular country and
Brokerslink’s general policy is not
to have more than one member
in each country. “We don’t collect
brokers,” he adds. n
which works with and provides
services to Brokerslink members
and partners all over the world.
“This is typically to help mem­
ber companies with tenders for
big construction projects when
they need support in terms of
risk management protocols,
policy wordings, rating or some
other aspect of the market,”
Fonseca says.
Brokerslink recently estab­
lished an employment benefits
team along similar lines. What
developments such as these
demonstrate, according to Fonse­
ca, is that Brokerslink is not only
commercially focused, but it can
also very efficiently channel the
relevant knowledge and exper­
tise to where they are needed in
the network.
“One of the issues for small
to medium-sized brokers is that
they cannot afford to maintain
a range of specialty lines prac­
tices. But inside the Brokerslink
network, they can access and
use that knowledge and skill. An­
other issue for smaller brokers is
branding,” Fonseca says.
“As a member of Brokers­
link, they become part of a big
brand, of a large global company.
Domestic brokers, for example,
are suddenly transformed into
international players because of
access that Brokerslink gives
them to business and talent in
other markets.” n
Expansion
‘We have got quite a few gaps in our
network on the African continent.
There are around 55 countries in
Africa and we are currently present
in about 15 of them’
Going for-profit
‘It was clear to us that we needed
to be more than just a defensive
network which existed to protect its
members’ business interests, extend
their geographic reach or to help them
provide a certain level of service to
their clients’
Proactive approach
‘In the current environment, no
broker can afford to sit around and
wait for business or talent to walk
through the door’
Fonseca on…