Steadfast Group Limited · ASX:SDF
Steadfast — Investor Day (June 2015)
71 slides from Steadfast's investor day presentation, Jun 17, 2015
Slide 1: Investor Day Presentation cover letter
For personal use only 17 June 2015 Market Announcements Office ASX Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Dear Sir INVESTOR DAY PRESENTATION Please see attached the Investor Day slides being presented today in Melbourne and in Sydney on Friday 19 June. Yours faithfully Linda Ellis
Slide 2: Trademark notice
For personal use only Steadfast, the Steadfast logos, Strength when you need it, None of us is as good as all of us, SVU and Steadfast Virtual Underwriter are registered trademarks of Steadfast Group Limited in Australia and other countries.
Slide 3: Important notice
Important notice For personal use only This presentation has been prepared by Steadfast Group Limited (“Steadfast”). This presentation contains general information in summary form which is current as at 17 June 2015. This presentation is not a recommendation or advice in relation to Steadfast or any
Slide 4: Robert Kelly, Managing Director & CEO
For personal use only Robert Kelly, Managing Director & CEO
Slide 5: Who we are
Who we are For personal use only LARGEST GENERAL INSURANCE INTERMEDIARY IN AUSTRALASIA1 747 • Service provider offices across 306 broker businesses 22 underwriting agencies 1 Australia, New Zealand Singapore & Singapore • Equity participation 5 152 56 broker businesses 22 underwriting agenci
Slide 6: Business strategy
Business strategy For personal use only • Grow shareholder value • Continue to enhance the services we provide to the Steadfast Network • Build and develop strategic relationships with insurers and other parties • Deliver synergies from our acquisitions made to date • Grow from acquisitions • Cross-
Slide 7: Our DNA
Our DNA For personal use only • Helplines: legal, technical, HR, IR, contractual liability • Technical service team We help one • Triage process • Best-in-class policies another. • Internal legal expertise • Model broker programme “None of us is as • Training good as all of us.” • Open market choice
Slide 8: Partners & Broker Services
For personal use only Partners & Broker Services Nick Cook, Executive General Manager
Slide 9: Partners & Broker Services team
Partners & Broker Services team For personal use only • Team Executive General Manager Broker Services Manager Group Technical Manager Broking Technical Manager • We are people from the “HOOD” that link Steadfast Group, Strategic Partners and the Steadfast Network • KPIs Continuing buildin
Slide 10: Deliverables
Deliverables For personal use only Structured Maximum Remuneration approach participation linked BUILD Differentiated Improved propositions engagement Competitive Advantage 9
Slide 11: Guiding principles
Guiding principles For personal use only CUSTOMER BROKER INSURER Service Coverage Scale Coverage Security Transaction efficiency Security Ease of transaction Predictability Peace of mind Remuneration Profitability Training & compliance 10
Slide 12: The Opportunity
The Opportunity For personal use only SCALE DIVERSIFICATION GROWTH Largest insurer accounts for Steadfast GWP growth above $4.1b GWP in FY14 ~17% industry average of 3% Steadfast members deal with $900m in business insurance New members 200+ insurance providers Steadfast members access Access to 22
Slide 13: Roadmap
Roadmap For personal use only We are at our best when we are STRONGER TOGETHER IDENTIFY OPT IN PLANNED DEVELOP Steadfast is GROWTH CHOICE APPROACH OPPORTUNITIES RECOGNISED AREAS MODEL 12
Slide 14: Business Development
For personal use only Business Development Adrian Humphreys, Executive General Manager
Slide 15: Business Development
Business Development For personal use only • New person / new role / old experience • Team Executive General Manager Broker Development Manager 1 Broker Development Manager 2 Broker Collateral Marketing Manager • Working closely with the Steadfast Network • Goal – evaluate / assist / impleme
Slide 16: Deliverables
Deliverables For personal use only Organic growth initiatives via the 3 Ps and new & existing clients simultaneously PEOPLE PRODUCT PROCESS • Identify people • Establish product pipeline • Business planning • Sales upskilling • Pipeline management • Structure & reward • Celebrate success EXISTING CR
Slide 17: Roadmap
Roadmap For personal use only Ensure best practice initiatives are successful before full roll out BEST PILOT & RESEARCH PLANNING ASSESS ROLL OUT PRACTICE Met with over Work stream, Choose brokers, Constant 100 brokers & Brokers best time frames, communications, source, detail plans & gathered resou
Slide 18: Strategic projects, Marketing & HR
For personal use only Strategic projects, Marketing & HR Samantha Hollman, Executive General Manager Projects, Brand, People
Slide 19: Strategic Projects
Strategic Projects For personal use only • Work directly with Managing Director & CEO to implement strategies for the Group • Two current project examples: 1. Life insurance with Steadfast Life and MetLife 2. Steadfast Asia 18
Slide 20: Steadfast Life / MetLife
Steadfast Life / MetLife For personal use only Steadfast Life • Provides Steadfast Network with a vehicle to offer life insurance products and services to their client base • Sit on the Board of Steadfast Life Partnership with MetLife • One of the world’s largest providers of life insurance • Produc
Slide 21: Steadfast Asia
Steadfast Asia For personal use only Explore and develop opportunities in Asia • Establish Steadfast Asia broker network to service Australasian brokers in Asia • Explore / evaluate / implement cluster network within Asia • Consider equity positions in appropriate brokers within Asia • Explore porta
Slide 22: Human Resources Strategy
Human Resources Strategy For personal use only Vision To have a culture of excellence that drives business performance and is a strategic 500+ staff differentiator. 8 businesses Mission 11 locations Create a highly engaged workforce that delivers compelling customer experiences every time. HR team o
Slide 23: HR Strategic Pillars
HR Strategic Pillars For personal use only Three Strategic Pillars: One HR, One Experience, One Culture ONE HR ONE Experience ONE Culture Integrate HR in Head Create the best company Ensure the customer is at Office businesses people have worked for the heart of what we do • Cost reductions achieved
Slide 24: Human Resources
Human Resources For personal use only • Develop a culture of excellence that drives business performance Attract and retain quality people to deliver A company’s on strategy ability to execute Engage workforce to deliver improved business performance its strategy depends on having • Succession P
Slide 25: How HR adds value
How HR adds value For personal use only • Work performed by HR is strategic in nature and creates a structure that allows the business to succeed HR builds organizational • Intimate knowledge of the business’s strategy and the existing capabilities of the organization capability to execute business
Slide 26: Marketing
Marketing For personal use only • Marketing for: Steadfast Group Broker Network Steadfast Underwriting Agencies Foundation • B2B + B2C • Team of 7 people 25
Slide 27: Brand Strategy
Brand Strategy For personal use only • Expand brand awareness to grow Network Broker business and in turn shareholder value • Develop and promote the 22 separate brands Brand strategy under Steadfast Underwriting Agencies brings your • Broker co-branding competitive • Support the community through S
Slide 28: FEAR LESS Campaign
FEAR LESS Campaign For personal use only National Campaign, January 2015 – June 2015 TV (Foxtel & SBS) Billboards Digital Marketing 27
Slide 29: Sponsorships
Sponsorships For personal use only Nissan Motorsport Brisbane Roar 28
Slide 30: Broker Collateral
Broker Collateral For personal use only Steadfast Corporate Video Key message About here Steadfast Booklet Animation Video for Broker Websites 29
Slide 31: Website
Website For personal use only Brand is more than your logo, name or slogan – it’s the entire experience customers have with your company. 30
Slide 32: Steadfast Direct & New Zealand
For personal use only Steadfast Direct & New Zealand Allan Reynolds, EGM Direct & New Zealand
Slide 33: Steadfast Direct
Steadfast Direct For personal use only November 2014 Announced new line of retail insurance products – Steadfast Direct First two product offerings – home and motor April 2015 Allan Reynolds appointed EGM Direct & New Zealand End of April 2015 Steadfast Direct home and motor started piloting with si
Slide 34: Rationale
Rationale For personal use only • Protect SME Clients • “Take back the farm” • Competitively priced retail product offering • Grow revenue for Steadfast (M&A) and brokers • Targeting retail product offerings sold by Steadfast Network (annual GWP of $350m or 9% of total) but more importantly new busi
Slide 35: Behind the scenes
Behind the scenes For personal use only • IT platform developed to sell Steadfast Direct online initially through the brokers and later directly to clients • Exclusive to Steadfast Network • End to end solution (from quote to policy) 34
Slide 36: Roll out of Steadfast Direct
Roll out of Steadfast Direct For personal use only 1. Steadfast Network Brokers 2. Direct to customers through the SVU platform 3. White labelling / affinity 4. New Zealand 5. New product offerings 35
Slide 37: Steadfast New Zealand
Steadfast New Zealand For personal use only History April 2013 Acquired equity interest in Rothbury – top 5 broker in NZ acquired 17.9% in April 2013 and a further 12.2% in August 2013 July 2014 Acquired Allied Insurance Group – 2nd largest GI network in NZ October 2014 Allied rebranded Steadfast Ap
Slide 38: Strategy
Strategy For personal use only • New Zealand-ise Steadfast Australia platform • Remain a leading market player through organic growth • Create cross sell opportunities for Steadfast Underwriting Agencies • Convert accretive acquisition opportunities 37
Slide 39: Strategic initiatives
Strategic initiatives For personal use only • Implemented Marketing & Administration (M&A) fee model Strong • Strategic partners aligned to Steadfast progress made • Two additional brokers have joined Network since over 12 Allied was purchased in July 2014 months 38
Slide 40: Finance
For personal use only Finance Stephen Humphrys, Chief Financial Officer
Slide 41: Finance team
Finance team For personal use only • Team of 13 including: CFO Group Financial Controller CFO – Steadfast Underwriting Agencies Senior Analyst Chief Risk Officer Investor Relations Manager 40
Slide 42: Data collation
For personal use only Data collation 41
Slide 43: Data collation
Data collation For personal use only • Scalable • No business disruption – new acquisitions feed into existing infrastructure • Monthly data collection – full trial balance of each entity, GWP data • Semi annual collection – GWP data from non-owned Network Brokers • Full analysis capability to under
Slide 44: Benchmarking
Benchmarking For personal use only • Financial data from all network brokers • Data is normalised to compare like for like Average profit margin xx.x% • Brokers receive a pack which highlights their performance on various metrics, and compared Average F&C as % their performance against the following
Slide 45: Example of benchmarking (not real data)
Example of benchmarking (not real data) For personal use only Revenue per Principal & Account Managers FY13-FY14 Employee Costs as % of Revenue FY13-FY14 500 47.0% 400 46.0% $’000’s 45.0% 300 44.0% 200 43.0% 42.0% 100 41.0% 0 40.0% Your Average Size Band Group Average State Average Metro Average You
Slide 46: Risk analysis
Risk analysis For personal use only • Risk Heat Map reviewed continuously and all key risk areas monitored by CRO • Internal audit review of all entities on rolling cycle • Broad coverage – financial, operational and governance issues • Complements monthly analytics • Complements annual external aud
Slide 47: Operations and Acquisitions
For personal use only Operations and Acquisitions Dana Williams, Chief Operating Officer
Slide 48: Operations and Acquisitions team
Operations and Acquisitions team For personal use only • Team of six, including two working directly with brokers • Focus on: Acquisitions Source and perform diligence on potential acquisitions both inside and outside the network Transitions Transition the new entities into the SDF operating company
Slide 49: Acquisitions since IPO
12 acquisitions since IPO For personal use only Underwriting Agencies Brokers (rebranded Steadfast) Complimentary businesses 48
Slide 50: Bolt-ons since IPO
11 bolt-ons since IPO For personal use only Steadfast Network Broker Bolt-on Centrewest Logiudice Finn Foster Mooneys Insurance Brokers AIS Insurance – Brisbane Regional Insurance Brokers Ausure Brisbane Les Wigginton VFP Insurance Brokers Brecknock Insurance Brokers McIntyre McLardy McShane King Ro
Slide 51: Disciplined process and criteria
Disciplined process and criteria For personal use only 1. Meet with potential partners to evaluate cultural and strategic fit 2. Discuss the Principal’s vision, motivations to sell and timing 3. Can Steadfast as a partner add value to the business? 4. Can we merge with an existing entity/become a Co
Slide 52: Not afraid to walk away
Not afraid to walk away For personal use only We view numerous deals that do not complete with the primary reasons being: 1. Culturally incompatible 2. Vendor expectations too high 3. Not part of our core business 4. Endless negotiation and deal fatigue 5. Margins too low 51
Slide 53: Mergers and Hubs
Mergers and Hubs For personal use only • Hubs established in six states • 25 entities merged into 8 platforms • On track to deliver 7% EBITA margin improvement for Hubs by FY17 Brisbane 3 into 1 hub 64% owned Perth Adelaide Sydney 3 brokers into 1 5 into 2 hubs 6 into 2 hubs 67% owned 71% owned 60%
Slide 54: Centralisation and offshoring
For personal use only Centralisation and offshoring Peter Roberts, EGM - Integration Synergies
Slide 55: Centralised functions
Centralised functions For personal use only RATIONALE POTENTIAL • Centralised functions, create scale and • 306 broker businesses EFFICIENCY • 22 underwriting agencies • Offshore markets = HIGH QUALITY CANDIDATES at a reasonable cost • Ancillary businesses • Expand services to brokers = efficiency •
Slide 56: Moving offshore
Moving offshore For personal use only VIETNAM PHILIPPINES • Finance, marketing, and IT • Transactional claims handling • Partnering with an established 3rd party • Global Shared Services Centre of QBE who are providing infrastructure and basic HR oversight for our dedicated employees 55
Slide 57: How?
How? For personal use only AREAS OF EXPERTISE OUR APPROACH • Finance – accounts payable, • Transfer of functions controlled and reconciliations and management progressive accounts preparation • Well documented and standardised • Marketing – graphic design, processes websites, promotional material, p
Slide 58: Timing of benefits
Timing of benefits For personal use only • Offshore roles are a small part of our current operations • Implementation underway in 2015 calendar year • Benefits won’t be realised until FY17 57
Slide 59: Steadfast Underwriting Agencies
For personal use only Steadfast Underwriting Agencies Simon Lightbody, Chief Executive Officer
Slide 60: Our business today
Our business today For personal use only Steadfast Underwriting Agencies Holdings 100% Owned 50-99% Owned <50% Owned Agencies Agencies Agencies Interruption Accident & Health CAIP Income Emergence Insurance Underwriting Agencies Protection Protection (70%) (25%) (IUA) MECON Insurance Sterling Insura
Slide 61: SUA growth
For personal use only SUA growth 60
Slide 62: Agencies
22 agencies For personal use only Hard-to-place and Residential and Mobile plant and Strong focus on complex risks including Marine and Building and commercial strata equipment SME insurance programs environmental liability motorcycle construction industry Specialised equipment, Community care, Prof
Slide 63: SUA structure
SUA structure For personal use only ASX Board SUAH Board Simon Lightbody CEO HR Legal Finance Compliance 62
Slide 64: Agency strategy
Agency strategy For personal use only • Consistent Acquisition Process • M&A Team working with Underwriting Team • Efficient Transition to Steadfast • Strong Operational Team • Developing Strong Core Values • Believe in Brand Strength 63
Slide 65: SUA website & app
SUA website & app For personal use only www.steadfastagencies.com.au 64
Slide 66: Robert Kelly, Managing Director & CEO
For personal use only Robert Kelly, Managing Director & CEO
Slide 67: Business strategy
Business strategy For personal use only • Grow shareholder value All • Continue to enhance the services we provide to the Steadfast Nick, Adrian, Sam, Allan, Network Stephen, Simon • Build and develop strategic relationships with insurers and other Nick, Adrian, Allan parties • Deliver synergies fro
Slide 68: Questions
For personal use only Questions
Slide 69: Executive Management bios
For personal use only Executive Management bios
Slide 70: Executive Management Team
Executive Management Team For personal use only Robert Kelly, Managing Director & Chief Executive Officer Robert co-founded Steadfast and has over 45 years’ experience in the insurance industry. He was named equal first Most Influential Person in Insurance by Insurance News in 2015 and awarded the A
Slide 71: Executive Management Team
Executive Management Team For personal use only Dana Williams, Chief Operating Officer Dana joined Steadfast in January 2014 and was promoted to COO in June 2014. Her focus is on working with Steadfast equity brokers to improve their operations, as well as acquisitions including due diligence and in