Hyperion CEO David Howden “over the moon” at 2018 results

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Double digit growth in revenue and Ebitda.

Hyperion has delivered a 16% uplift in revenue for the year ended 30 September 2018 to £620m.

The business did not reveal profit and loss figures but did report an 19% increase in Ebitda to £181m.

The breakdown of the revenue numbers showed that the company had achieved organic growth across the board.

The underwriting division Dual topped the table with 14% organic growth as revenue rose to £109m.

Broking divisions Howden and RKH posted 4% and 6% organic uplifts. Howden’s revenue moved up to £282m while RKH’s came in at £229m.

Phenomenal
Hyperion CEO David Howden told Insurance Age that Dual’s UK offering had “a phenomenal year” growing gross written premium by 37% to just short of £300m – a bigger rise than any other part of the company achieved.

Looking at Hyperion overall he admitted to being “over the moon” with the numbers.

“It reflects the success of our business model,” he summed up.

The business is now in its 25th year and Howden explained the “differentiated” model.

He listed that with a 44% total stake employees were the biggest block of shareholders and he claimed that Hyperion’s investors were long term backers rather than a private equity firm with a traditional 3-5 year holding.

“We are looking at the business over a 25-50 year period where the employees have the controlling shareholding in the business,” he summed up.

“Our culture has independence embedded into it. We are earning the right to be independent and think we are very different.”

Flat
He also argued that Howden was, by revenue, the world’s largest independent retail broker.

During the year the division merged its UK retail and professional indemnity units within Howden.

Revenue was flat at £63m.

“The UK didn’t grow organically last year,” Howden admitted.

“The reason for that is we have gone through a major restructuring.”

However he revealed that in the first quarter of the 2019 financial year revenue was up 10%.

“In the UK we have made a big investment in people and you will start to see the revenue from them coming on stream,” he maintained.

Buy
Hyperion bought employee benefits specialists Punter Southall Health and Protection Holdings after the end of the financial year.

What the company will not be doing is taking on the consolidators in the UK general insurance retail space with a buying spree.

“Ultimately we are very focused on the specialist retail broker and are very strong on having expertise in certain areas,” Howden said pointing out that the majority of companies were now either American or PE owned.

“We don’t really see that we want to play in the field of buying general retail brokers.

“That is the realm of the PE houses and they can do that.”

Digitalisation
At the time of the 2017 results Howden stressed the need to embrace technology and digitalisation warning the industry if it didn’t others would.

He flagged two developments in the past 12 months as proof the firm had backed up its intentions with cash and action.

Firstly a shared service centre in India has grown from four people to 250.

“We have made those investments and you will really see operational efficiency come through,” he noted.

Adding: “We really need to have a strong focus and you can’t do it as your night job if your day job is being an insurance broker.”

Secondly, Hyperion X has been launched as a standalone business under Barnaby Rugge-Price.

Howden clarified that it was also “set up to support Howden, Dual and RKH to transform their businesses”.

Growth
And he concluded by returning to the theme of employee ownership driving the growth of the business.

According to Howden “roughly” 20% of staff are shareholders.

Last year the company invested £53m in buying back shares in the business to recycle them to the next generation as it targeted having 30% of employees holding shares within the next three years.

“The 30% is not pie in the sky, it is something we are very, very focused on,” Howden committed.

“If you think about proper succession planning, what you are stopping the business doing is [leaving] all the equity in the hands of people that are going to retire.

“[Because if you don’t] a trade sale happens or if you are big enough private equity.

“We don’t want that.”

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