Dave Haynes - The Big Interview

This article was first published by Insurance Post

ARAG UK CEO Dave Haynes sits down with Harry Curtis to discuss the impact of the legal expenses insurer’s acquisition of DAS and how Labour’s legislative agenda is making its products more relevant than ever.

At the beginning of last year, legal expenses insurance provider ARAG acquired its long time rival DAS UK, creating a combined UK business with gross written premiums in the region of £220m.

For Dave Haynes, who took the reins as CEO of the combined business in April this year, ARAG’s acquisition target was a familiar one.

He joined DAS as an underwriter straight out of school in 1984 and spent the first two years of his career at the Bristol-based insurer. In 1992, after six years away at Allianz Legal Protection – which he joined at its inception in 1986, working his way up to senior underwriter – he rejoined DAS, initially in a sales role.

“Everyone should do it,” Haynes says of the experience, “if you’re underwriting or you’re in management, because it’s a real eye‑opener and you get to know the customer.”

It was during this stint at the insurer that he got his first taste of running a business. In 1997 he was sent to St Albans to manage a business with a team of around 50 people that DAS had acquired.
Upon his return to Bristol two years later, Haynes joined DAS’s senior management team, running its underwriting and product team until 2005.

Starting ARAG UK

By this point, he and a small group of fellow colleagues were beginning to feel restless. Then opportunity came knocking: Düsseldorf‑based legal expenses group ARAG had set its sights on the UK, where it lacked an operation.

“We were quite fortunate that we decided to leave at the time that they were looking to make an entry into the UK, and between the six of us that set it up, we had all the necessary functions covered,” Haynes says.

ARAG UK received authorisation in the summer of 2006 and started trading as a managing general agent, with Brit as its sole capacity provider.

Haynes and his fellow ARAG UK trailblazers – who included Tony Buss, his predecessor as CEO, and Andy Talbot, who remains at ARAG as director of after‑the‑event, broker sales and marketing – had accumulated the know‑how in the legal expenses market that enabled the UK business to forge a path forward.

“We knew there was an opportunity to come out with something that was a little bit more bespoke and tailored,” Haynes remembers.

“As an MGA, you can never be quite as cheap. If an insurer decides it’s going to write to a much lower margin, or write some kind of marginal business, it can do that.

“If you’re writing as an MGA to a carrier that always says they want to work to a margin of X, you’ve got to keep them on side. You can’t cut the margin.

“So, we knew we couldn’t compete on price. We were never going to be the cheapest. That’s not how we set up.

“Most of our business we obtained in the early days was high net worth, and it was all about product innovation, with tailored products and a high level of service.”

By the point of the acquisition of DAS UK at the start of 2024, ARAG UK had grown to a business with around £70m in gross written premiums and a headcount of around 170 people.

Acquiring DAS UK

When DAS UK’s Munich Re‑owned parent company Ergo decided to offload the business in 2023, the ARAG group jumped at the opportunity. The acquisition was announced in July 2023 and completed the following January.

“Having left DAS 20 years ago, it seemed quite surreal at the time,” Haynes says.

He joined the executive management committee of the combined business as director of underwriting, along with Talbot and Buss, who led the business through its first 16 months post‑acquisition.

“His intention was always to kind of see it through the start of the integration,” Haynes says of Buss. “Round about the summer of last year, we were talking with the group about succession planning and Tony signalled his intention to retire.”

Haynes subsequently became CEO and now leads a business of over 900 people, 700 of whom are based in Bristol, where the company brought together all of its staff under one roof at the start of April, coinciding with the beginning of Haynes’s tenure as CEO.

Insurance company

Haynes says the two businesses complemented each other well, with DAS UK giving ARAG – which had always operated as an MGA in the UK – its own insurance company, as well as a law firm.

In January this year, DAS Legal Expenses Insurance Company was rechristened ARAG Legal Expenses Insurance Company and the task of moving all business to the in‑house insurer began.

“That was a huge advantage of the acquisition,” Haynes says. However, the move means waving goodbye to some longstanding capacity partners.

“I looked after the underwriting relationships,” he continues. “We used Brit, HDI, Scor, and we had some of our own capacity through the group, and they were all fantastic relationships.

“We got on really well with all of them. I really valued those relationships, and we looked after them. But of course, we were an MGA, so we were never quite in control of our own destiny.”

Lawyers

A similar story is unfolding with regard to ARAG’s legal panel. While Haynes says the company isn’t looking to run everything through the in‑house law firm it acquired through DAS, he concedes the new ARAG will end up working with fewer firms as it looks to harmonise its panel.

“The law firm can only take certain types of cases and certain types of claims,” he says. “For instance, it’s not clued up on things like clinical negligence. It’s just not got the expertise to do that.

“Is it worth employing in‑house to do that? Maybe, but not right now.”

Outlining the capabilities of ARAG Law, he says it is very strong in contract, property, consumer and personal injury work, and will also handle some more complex cases.

However, some services will remain outsourced. “For example, for foster carers, we have a lawyer that attends police stations 24/7 to defend and represent carers in the event of accusations. That kind of service is really unique, and we wouldn’t look to replace that.”

Integration

ARAG has now reached the end of an 18‑month integration process, completed at the end of June. Alongside transferring business into its new insurance company, the period involved bringing together teams from both organisations.

“We went through a lot of pain at the start and did lose a few people within the hierarchy,” Haynes says. “The acquisition was about growth; it wasn’t about slashing jobs.

“Generally, retention rates are really good, and our turnover rate is lower than it was 18 months ago.”

The business has now entered a further transformation phase, expected to last 12 to 18 months, focused on better products, better service, and a better workplace.

Technology will be key, including deployment of a new claims platform and exploration of artificial intelligence. Document summarisation and booking legal advice calls are cited as potential AI use cases.

Expanding distribution

Haynes speaks passionately about extending the reach of legal expenses insurance, describing it as a moral mission as well as a commercial one.

Founded in 1935 by attorney Heinrich Fassbender, ARAG was built on the belief that everyone should be able to assert their legal rights, not just those who can afford it.

In the UK, however, legal expenses insurance is typically sold as an add‑on rather than a standalone product.
“We’re reliant on brokers, MGAs, insurers and lawyers to sell our products,” Haynes says.

ARAG runs training events and has joined the Law Society’s 21st Century Justice project to improve access to justice, particularly as legal aid has become harder to obtain.

Legislation

Prospective legislative change may further boost ARAG’s relevance. The Employment Rights Bill, currently being scrutinised by the House of Lords, would reduce the qualifying period for unfair dismissal from two years to day one, among other measures.

“The law is definitely moving in favour of the employee,” Haynes says, increasing the need for employer protection.

The Renters’ Rights Bill could also be significant, particularly for ARAG’s landlord legal expenses products.

“We try to look ahead and adjust pricing,” Haynes explains. “If you’re not proactive, you’re chasing your tail.”

Court backlogs also strengthen the case for legal expenses insurance, he argues.

“Legal expenses is all about resolving the dispute through mediation, arbitration and advice. The last thing you want is to end up in court.”

Ambition

Haynes says ARAG has a three‑year plan to reach £300m in gross written premiums by the end of 2027, up from £220m at the time of the DAS acquisition.

Growth is expected across commercial, family, landlord and motor products, with increased usage driving premium growth.

“The market is crying out for good solutions, fair value and good outcomes,” he concludes. “Those conversations are much more prevalent now than they ever were.”