Interview: JLT's Dominic Burke - a thoroughbred performer

Ambition is not an attribute you could ever accuse Dominic Burke of lacking. Having joined JLT when he sold his business back in 2000, he initially contemplated staying only for the earn-out period. By December 2005 he was not only still there, but was unveiled to a somewhat surprised market as its new group CEO (see below).

His ambition for the group today is arguably stronger than ever, and Burke is adamant that JLT will be where he ends his insurance career - before retiring to run his stud farm and breed much loved racehorses.

"JLT just gets in your blood; I can't contemplate ever working anywhere else. Clearly giving up control of my own business after 20 years was a big step to take. But this is a very entrepreneurial company and I quickly found my feet," he says.

"Early on, I felt that I'd like to become group CEO one day and set out my stall to do just that. I make no apologies - people who got to know me early on saw that's what I did."

Never one to miss the opportunity for a racing analogy, Burke continues: "Of course, coming from a regional retail background in the north west of England to try and lead JLT, I was always going to be an outsider, but outsiders do win - look at last month's Grand National.

"So, I got my nose in front and am delighted to be here, with the same drive and ambition as the day I joined."

Since he became group CEO nearly seven years ago, Burke has grown JLT's headcount from just under 4000 to exceed the 7000 mark, in line with substantial growth in revenue and profits.

He has also overseen no fewer than 30 bolt-on acquisitions since 2005, spending approximately £150m. But he puts this latter figure in perspective.

"We sold our US retail business for $100m [£62.4m] back in 2006, so our net outlay in comparative terms is very small. But those bolt-ons have supplemented the existing businesses, creating greater depth around capability and market," he says.

"It's a strategy that has worked well; we've made acquisitions right around the world - and no part of the group is closed to this prospect. I'm committed to all five lines of our business: specialty retail; specialty wholesale; reinsurance; employee benefits; and [underwriting platform] Thistle. We will continue to make capital investments."

But Burke puts equal emphasis on the importance of underlying organic growth - having made a point of highlighting how its 7% growth rate in the group's full-year 2011 results significantly outstripped that achieved by any of its closest rivals and how this demonstrates JLT is winning market share.

Confidence in growth
His confidence at maintaining organic growth remains: "I expect that, when we sit around the table next March, there will be a similar picture: we will continue to take market share off our competitors.

"Last year, we grew our headcount by 500 people - 8% of our workforce - and none of those were via acquisitions. So, our organic growth record is commendable and demonstrates a compelling client proposition."

Burke's confidence at being able to attract top talent to JLT is arguably stronger than ever - having gone so far as to boast that it could now poach the best people rival firms have to offer, following the extra 10% stake its 30-year backer Jardine Matheson took for £167m.

"This gave us real strategic advantage, not simply because it was a very public statement about the long-term nature of its investment in JLT but its absolute commitment to our strategy and the management," Burke declares.

"It also puts to bed once and for all those rumours that JLT is going to end up in the clutches of one of our competitors. In fact, I'd suggest it would be a profoundly unwise investment for anyone to own, other than the current shareholders, because our DNA is so entrepreneurial.

"It became clear this investment enabled us to talk to clients, both prospective and current, to our staff, and also prospective employees about the fact they no longer needed to fear joining JLT because of some rumour it was suddenly going to be owned by A, B or C. That's firmly and finally gone."

As far as Burke is concerned, therefore, it's full steam ahead on executing JLT's strategy of international growth, underpinned by its specialty focus.

"We're never going to be all things to all people; we're strong transactional brokers, with deep-seated technical knowledge and expertise in the industries and sectors we focus on," he says.

"And we want to build greater depth in the new emerging economies of the world as well as in our existing businesses."

And that means the doors are open for talent to walk in: "We are investing considerable sums of money in our own talent but, with the rates of growth we're achieving, we can't sustain ourselves just with our own talent.

"So we are always open to recruit good people if they find their current employers or workplace doesn't provide them with the same stimulus, reward and sense of ability to act as they see fit for the benefit of their clients."

Following the 2010 full-year results, Burke talked of JLT's "firepower" for acquisitions, referring to the unused debt facility, which had gone above £200m for first time, increasing to £350m.

Similar bold claims over firepower were made on delivery of the 2011 results, so is this facility being kept for a sizeable or even transformational deal?

"Our numbers clearly demonstrate there's no need for us to do any transformational deals, and equally I don't anticipate any will come into the radar. I'm not sure there are any for us to do anyway, that wouldn't dilute our culture," states Burke.

"What is critically important is that we can't preach the virtue of culture and DNA, then all of a sudden ignore that because some opportunistic large deal emerges. I'm not going to be held hostage to that.

"Nor are we that type of business; we'll continue to tread carefully but surely, taking our strategy forward. Everyone within the organisation understands the strategy of JLT: they know where we are going, they know how we are going to get there. So we'll stay on message; we'll keep it simple."

In terms of where the biggest opportunities lie for JLT in the next 12 to 24 months, Burke pinpoints the reinsurance and treaty space in particular.

"Our reinsurance business has recently seen Alastair Speare-Cole join us from Aon Benfield and our challenge there is to build a business of real relevance to the reinsurance space. It's a good business; we have created a tremendous platform but now we need to kick on and grow," he says.

Immature opportunities
International healthcare and benefits is another market he identifies as immature and, therefore, offering great opportunities, leveraging against its existing platforms on the property and casualty side.

"As for our wholesale business, we're seeing new capital markets opening up on a fairly regular basis; it used to just be London and Bermuda, now we can cite places like Singapore, Dubai and Miami and maybe even parts of Rio de Janeiro," he explains.

"We need access to those capital markets so we can place clients' business in whichever market best suits them, unrestricted by geography or regional barriers."

He has four promises for the imminent future: JLT will be bigger, more profitable, employ more people, and win more market share. As to how that's going to happen, he is less willing to be pinned down on specifics.

"Will we open new offices? Yes. We've already announced our intention to open more regional offices in Brazil. We will expand our Latin American and Asian footprints, less in terms of new territories in the latter than depth of resource and people skills," he says.

"Will we make acquisitions? Yes. But I can't promise anything until such time as we've done the right level of analysis and can satisfy ourselves pricing is right. Have we got a list of people we are talking to? Yes. Are we very busy? Yes. Will we do deals? I hope so, but they will need to be at the right price, add value to JLT and not dilute our culture. If they don't meet every one of those litmus tests, we simply won't do them."

Next month will also see JLT's three-year business transformation programme come to fruition, a vision of Burke's that has developed to enormous scale from its earliest guise when he was chief executive of the employee benefits business.

"With my senior management team I had started to look at India and we bought a pensions IT platform back in 2001/2002 for defined benefits pensions schemes. Out of that we ended up with three or four people in India," he says.

"This three-year programme has achieved far more than we ever thought it would. As always in life, there were those that were enthusiastic about it at the outset and those that were a little less keen. Happily, I've got everybody across the line and all the businesses are benefitting from what we have to offer.

"Today we have 700 people in Mumbai; it's our second largest operation outside London. And these are JLT employees - this is not an in-source or an outsource, just a pure knowledge centre, employing some of the best people JLT has.

"Whether you are in Jakarta in Indonesia, Vancouver in Canada, or Sydney in Australia, you will be touching Mumbai every single day."

Blowing the budget
Despite arguably blowing the budget, Burke is more than happy with the results. Originally predicted to generate £14m of savings at a cost of £18m, this programme has ended up generating annual savings of £23m for a one-off cost of £27m.

So, what else can we expect from JLT during the next 12 months? If transformational deals are off the agenda, what about transformational restructures?

"Don't expect anything wholesale; I'm not a wholesale type of guy. The only crazy thing I've done to date is try and run a stud. So, the crazy bit can stay in the personal arena: me trying to breed winners of Derbys and Classics," he says.

"There won't be any substantial changes at JLT; we don't need them. This is a company operating at the top of its game; we have no fires to put out. But neither are we complacent. I'm as hungry today as I ever was, and some of my new colleagues have come with real hunger in their bellies to prove themselves.

"But, more than that, I believe this organisation reminds them of their youth. We free individuals up, allow them to operate at the level they want to - deal with clients and not get bogged down by bureaucracy, process and reporting lines. It's a very invigorating environment."

With a global economy that is patchy at best, stagnant at worst, where capital is scarce and power is shifting from the more mature economies to the more rapidly developing nations, what does he hope to achieve in the next five years?

"If I have the privilege of still leading the business then, and I hope that I could - after all I'm only 53, not 93 - my ambition is to see how far the existing management team can take this business," he says.

"I believe we can make this a global business of real scale and relevance, one that doesn't get bullied by anybody and distinguishes itself from the competition, because we are absolutely a client-first organisation.

"I'd like to see JLT become a FTSE 100 company; I believe we have the capability of achieving that. But it will only come about as a reflection of successfully delivering on our strategy; becoming a FTSE 100 firm is not a strategy in itself.

"That would add enormously to our brand and profile on the global platform and is certainly something I'd like to see come to fruition before I retire to run my stud - if I can ever afford to retire."

Dominic Burke on ...

... his long-standing passion for horse breeding/racing and whether the format of the Grand National should be changed in light of the death of two horses, including the favourite Synchronised
"Inevitably horse racing gives you great highs and lows, not least as experienced by my dear friend Jonjo O'Neill [trainer of Synchronised]. I was talking to him only that morning, and sport is a great leveller.

"But breeding horses guarantees you will always have your feet firmly on the ground; the up days are very few and far between but, when they come, they are massive and sustain you through the bad days, which are plentiful.

"As for the Grand National, you've got to get everything in balance. Horses can break legs running around paddocks, and the National is a fantastic event; it tests man and horse and is part of our heritage.

"Yes, we should maximise safety procedures but without destroying the race. It will always be something that divides opinion and, if there had to be a change, I'd propose reducing the field size, rather than altering the nature of the course."

... London's competitiveness, remaining UK-domiciled and the likelihood of others returning to these shores
"JLT has no plans - now or in the foreseeable future - to redomicile elsewhere. It is a British company with international reach. I want the Treasury to maintain competitive levels of corporation tax but also income tax because we must retain London as the premier intellectual capital market in the insurance world, be that brokers or underwriters, loss adjusters or lawyers.

"The government's appetite to bring down corporation tax is laudable, and I'm sure they'll be some, predominantly underwriting, businesses thinking about whether now is the time to return, because it is not without cost, inconvenience or disruption that businesses have domiciled outside the UK tax regime."

... being described as an "enigma" to City analysts and a "fairly low profile" choice when named group CEO of JLT in December 2005
"I've never sought to create a profile external to our business, and I've only made one or two external speeches since I've been CEO, which has been a deliberate ploy. I'm employed by JLT to work closely with all our key stakeholders - be that clients or insurance markets, colleagues or shareholders - and that's where I spend my time.

"As to whether people would argue I'm a low profile sort of guy, I suspect not. Most have a pretty clear impression of me once they've met me."

... those abandoned takeover talks with Heath Lambert in 2006, and whether Heath and AJ Gallagher make better bedfellows than JLT might have
"When it comes to writing the epitaph of my career, Heath would not rank in the top 100 issues I've had to deal with. When I first took over JLT we faced substantial issues around strategy, structure, people management and identity.

"Yes, there was an opportunity to have a look to Heath - I'd spent my whole life buying businesses - but I decided I didn't want to do it. That's what happened. Look at our track record: we didn't need Heath then, nor did we need it when it was being sold recently. It's not a business I wanted to own.

"You'd better ask the management of Gallaghers whether they have proved good bedfellows or not. David Ross is certainly a very ambitious, tenacious character and Gallagher has come a long way under his lead."