Five years on: Delta co-founders on being David to the industry Goliaths

NBR Senior Writer Gill South talks to Ian and Craig about the origins of Delta, the highs, the lows, the strategies that won them Insurance Agency of the Year for two years running and what’s on the horizon.

Starting up their own insurance company five years ago in Auckland wasn’t the easiest path to take for two experienced industry executives when the sector was so dominated by giant, internationally owned companies.

Each had had international careers with big insurers. Brit Ian Pollard, Delta Insurance Group managing director and chairman, and Craig Kirk, the Australian-born chief executive – had worked in senior roles for AIG and other big insurance players around the world.  But basing themselves in Auckland for family reasons, they wanted to do something entrepreneurial.

The biggest initial challenge was arranging finance and bringing in the right business partners – in the insurance business businesspeople have to secure insurance capital to underwrite their portfolio risk. They won the backing of the global insurer, Allied World, to whom they were able to offer local knowledge, expertise, distribution and resource while Allied provided the insurance capital.  To access this, they chose to become a Lloyd’s of London Coverholder, which means they are approved to act on behalf of Allied World as their local underwriting agency via their Lloyd’s syndicate.

They also managed to attract key investors, Ryan Eagar and Michael Perrett from Chillaxing. Mr Eager has an insurance background and Mr Perrett,  as founder of ventilation company HRV in NZ, has big business knowledge.  Their strategic input has been more valuable than their monetary investment, the co-founders say.

Branding was the next challenge. Developing a brand from scratch in a competitive marketplace was a big task but the Delta Insurance founders say they have been able to leverage their connection with Lloyd’s of London, which is well known in New Zealand.

Tweaks needed for business model

The biggest stresses for the business founders have been events happening faster than planned for or, in one case, going into an area not in the original business plan.

It’s what entrepreneurs say yes to in the early days that can stay with them as a young business. And it had been so far so good, and the insurance entrepreneurs hadn’t thought they would do commercial property insurance as it’s something the big insurers in the market are pretty dominant in. But a business presentation by their now local equity partner, Andrew Beaton, won them over and they are glad it did.

“Mr Beaton came to us with a brilliant plan and [then] we understood the property sector a lot more and the risks and challenges that it brings,” Mr Pollard says.

Another change to the business plan was setting up in Singapore two years ahead of schedule – the company is the first Lloyd’s of London coverholder in Singapore.  The Singapore business was a stepping stone to other parts of Asia, the company already doing business in Taiwan, Thailand, Vietnam among others.  It’s been a good result but it took a lot of effort at the time.

“Setting up a couple of years early meant throwing everything at the operation: time, cashflow, planning, things we were expecting to do at years four or five,” Mr Pollard says.

As with many startups, the co-founders were going to start small,  working on a lean startup budget and with families to feed but, at the time they launched, there were layoffs in the insurance industry and some good people came on to the market. So they hired some of the best and with that capability of staff they built up areas of the business earlier than initially planned.

Competing with insurance giants

The founders of Delta Insurance wanted not only to compete against some of the big players but also to promote discussion in the industry, which they believed was desperately lacking.

Not only was the insurance industry “terrible with technology” but it also seemed to be going backward in customer service and transparency was not a priority, something regulators and the government are getting insurers to amend.

“We felt most of the large players were becoming a bit disconnected and they were lacking innovation and taking a backward step. We just felt with those factors and a bunch of others, we could inject a bit of dynamism into the market,” Mr Kirk says.

So that’s what they set out to do. In an industry they say has been slow to embrace technology, they have innovated, building their own underwriting and claims management system and introducing new products to the market.

They wanted to cover emerging risk on cyber, technology, drone, manufacturing and pollution.  Five years on, Delta claims to have been the first to launch a local environmental and pollution insurance policy, a suite of risk management solutions related to insurance for cyber risk, a local UAV/drone operator’s policy and a local intellectual property insurance policy.

They have also developed a panel of consulting firms and risk partners to help customers with risk mitigation and crisis response.

Mr Kirk is a member of the executive council of Fintech NZ and the co-founders are believers of the ‘insurtech’ revolution, which is only just starting. “We are building the markets as well as competing with the large players in the market,“ Mr Kirk says.

While some of the large insurers have tried various “game playing” blocking manoeuvres, it hasn’t stopped this five-year-old company from making it to the Deloitte Fast50 in 2017 and winning Underwriting Agency of the Year in 2017 and 2018 through ANZIIF.

“They see us as upstarts. They have tried their best to block us at times but, at a lot of larger insurers, we have got friends there, people we have worked with on broking or as colleagues,” Mr Pollard says.

More to do

The ambitions of the Delta Insurance co-founders are not fully realised. They would like to achieve 10 countries in 10 years. Mr Kirk says Singapore is just a stepping stone into all of Asia.

“Our model is quite scaleable not only internationally but also into other product areas as well,” Mr Kirk adds.

There will also be other products in the New Zealand flagship business.

Meanwhile, after years of working in giant organisations, the founders are intent on keeping their small company team spirit culture and keeping it Kiwi-owned.

“With larger corporates, by virtue of their size, it’s challenging to maintain a culture right across the business,” Mr Kirk says. It’s much easier to build and maintain that culture in a small company.

“We’ve not yet had anyone leave the business in five years. We feel like we picked the right people and the best people – we’ve also done a great job of fostering team spirit, including in Singapore,” Mr Pollard says.

Would anything tempt them to sell to a large insurance giant that values their innovation?

The experience they are having is too attractive at the moment, Mr Pollard says. “Why say yes to being bought by a multinational, which is what we escaped from?”

Quick company facts

  • Based in Auckland and Singapore, with ambitions to be in 10 countries in 10 years.
  • Has more than 15,000 customers and trades with over 150 independent insurance broking firms.
  • New Zealand and Singapore staff now 35.
  • Had an average of 66% growth per year the past couple of years.
  • Was No 34 in the DeloitteFast50 2017.
  • Main shareholders – Ian Pollard, Craig Kirk, Ryan Eager and Michael Perrett.

NBR Article – delta-insurance-david-industry-goliaths-wants-lead-conversation



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