‘We are the largest members agents in Lloyd’s,’ says Alistair Troughton, Head of Marketing at Hampden Capital. ‘We look after more than 1,200 UHNW families and individuals who collectively underwrite a premium capacity in excess of £2 billion’. He joined Lloyd’s in 1973 after a brief stint in the army. ‘Lloyd’s is a 328-year-old business that up until 20 years ago was solely funded and capitalised by private capital. That’s changed, so Lloyd’s is now primarily funded by corporate capital,’ explains Troughton. ‘My role is primarily educational, he adds. ‘It is a difficult time in the market so the important thing is to talk to potential clients and guide them. We are very proud of the fact that we give the best advice and it is vital that it is effective. I’m often the first person that they see, so it’s very important that we give the right advice from the start.’ Troughton is also not afraid to counsel delay for clients, and is particularly mindful of the need to avoid unnecessary risk.
Hampden also prides itself on the integrity of its service, which is provided within an extremely strict regulatory environment. Troughton notes that oversight of the insurance market continues to be rigid — the underwriting process remains subject to a comprehensive due diligence process: both externally by the FCA, and internally by Lloyd’s, who are also regulation-minded. This helps ensure that Lloyd’s members’ agents, who are also regulated by the FCA, are completely transparent. Investing in Lloyds is a long-term trade rather than a short-term investment, Troughton explains, and Hampden’s 16.6% Internal Rate of Return (IRR) over the last fourteen years is a testament to its success. Underwriting at Lloyds’s is now undertaken through a Limited Liability Vehicle (LLV), allowing clients to spread their capital through the market by region and class of business. This is a useful way for families to share in Lloyd’s returns beyond investment, the widely well-regarded practitioner added, giving diversity, low correlation and tax benefits for UK tax payers.
Clients are not always ready to trade, he observes, particularly when they have accrued their own wealth: the typical UHNW client is likely to be wary about leaping too soon, he tells Spear’s, having accrued their wealth thanks to a certain canniness. For Hampden Agencies, the right investor is one who understands risk. New clients are advised, at present, to underwrite a much smaller figure than their ‘end target’ premium capacity limit, a figure typically between £2 and £5 million. ‘We hope that we’re backing the right syndicates in Lloyds, and the right people,’ he tells us, adding that ‘they need to have the discipline not to underwrite the wrong business or the right business at the wrong rates’. When asked about their current approach, Troughton is illuminating: ‘Our current advice is to underwrite around 30-40 per cent of what your end target would be,’ he says. ‘Particularly in the current state of the market, we are talking with many wealthy families and individuals who want to underwrite,’ he says. And why? ‘Because of diversification, non-correlation, UK taxpayers’ benefits and the double use of assets.’ All in all, this is a highly experienced and impressive advisor.