To speak of MDS over the past two decades is also to speak of José Manuel Dias da Fonseca, the two inextricably bound together. Twenty-four years ago, having previously had a career as an economist and banker, José Manuel Fonseca, a self-styled man of culture, took over the reins of the Sonae Group’s insurance broking business, which at the time employed just over a dozen staff. Bit by bit, discreetly yet purposefully, he carefully raised the little giant that is today part of a much greater entity, The Ardonagh Group. Along the way, he founded Brokerslink, changing the broking sector in Portugal and every country where it was able to gain a foothold. And this is, fortunately, a beautiful, endless dream, as he reveals in conversation with Paula Rios, Editor-in-Chief of FULLCOVER magazine.

So, you went to market shopping for top names in the field...

The first person we invited to join us was Mr Adelino Pereira, former Director at Tranquilidade. He had earned the respect of his peers. We first met when I worked at Banco Português do Atlântico (BPA Bank) on an internship, at Tranquilidade. We also worked together on the first bancassurance project in Portugal. He joined the MDS board with all his expertise and prestige garnered over long years of hard work. Bringing him into the fold made the market look at us in a new light, because I was something of an outsider. And so, we grew and grew...

What was the first acquisition MDS made?

Our first acquisition in 2001 was a stake in a new ‘internet broker’ (we didn’t really use the term digital back then), FirstAssur, based in Paris. It was a risky bet. But Mr Belmiro was a bold risk-taker. We thought, sure, you could sell insurance over the Internet. But you couldn’t do it yet. At any rate, the broker quickly became an affinities operation, which proved absolutely essential to MDS. We have gone from strength to strength in that line of business thanks to that Paris operation. Given hindsight, it seems quite remarkable to me that our first investment, as the relatively small company we were, revealed true out-of-the-box thinking at the time. And we aimed outside Portugal on top of that — we went to France.

So, what happened in terms of national expansion?

MDS had no physical presence in Lisbon and that was obviously a major problem. We pondered opening an office or buying an operation and put our best foot forward. In the end we opted for the latter. In 2004, we acquired MSE, a broker presenting an attractive scale and a staff of ten. It was our first acquisition in Portugal after FirstAssur in Paris and Lazam in São Paulo, back in 2002. A key strategic move. These moves, by the way, helped us reel in people of high repute in the market, starting with you. You’d already built a high-profile career in the sector. We signalled to the market that we prized knowledge and expertise. Then, with your help, other talented executives joined us: Ana Cristina Borges, Tiago Mora, Manuela Lacerda, to name a few. I’m glad that they’re still with us.

We were beginning to project our identity outwards and spread our wings. Our turnover had reached €5 million when another opportunity came up — to acquire Unibroker. They were slightly smaller than us, but the acquisition propelled us to market leadership a mere five years since project launch... In the meantime, we’d also been launching significant projects, including Brokerslink.

And the network itself grew, did it not?

Yes. Early on it was essentially European. After that small, early core, Junge from Germany came in, then SRB from Switzerland, Bridge from the United Kingdom, and a few others. Along the way, Toby Esser, who then worked as CEO at Cooper Gay, introduced me to the leader of a network that resembled ours in Asia: the PanAsian Alliance, based in Hong Kong. I met Hei Wong in Singapore in 2006 and sometime later we closed on a partnership between PanAsian and Brokerslink. Right after that we had a similar experience in Latin America, with Alinter, another regional network based in Mexico City. All of this without a President or any formal organization. We’d meet frequently and make decisions as we went. We grew, gained traction, and then people started talking mergers. In November 2008, we met in Bangkok and basically re-founded the organization. We created a single network under a single brand: Brokerslink. To become truly global, we only needed the US to join. I met with a number of brokers over there. Frank Crystal, based in New York, decided to join our network.

So, we’d completed a fundamental phase of our expansion. What’s interesting is, we worked from the bottom all the way to the top. And we’ve always onboarded newcomers with great warmth and care. We’ve created a very strong network if you look at it through the lens of human relationships. This stage culminated with us holding the first Brokerslink Global Conference in Hong Kong, in June 2009. The first of many that the sector now jots down on the calendar every year.

What made Brokerslink’s expansion stand out?

Major networks usually began with American brokers’ associations. Brokers banding together to ensure they could service their customers abroad.

Brokerslink has always been more horizontal, it doesn’t really have a centre. It is neither English, nor American, or French. And maybe the fact that the real engine powering the network was a Portuguese company helped a great deal. Everybody else saw us as a peer, rather than a directing power.

Something that makes us stand out is that we only have one broker per country, which avoids conflicts of interest and helps membership remain strongly cohesive.

I should also not neglect to mention that we intended to drum up more business from the outset, not just share what we already had. That would have seemed a tad too defensive.

But you do share business within Brokerslink?

We do share business, but we also develop new opportunities as partners. We share knowledge and specialization. It’s fascinating when you deal with friends from 133 countries, cultures and regions that are so diverse. It’s absolutely extraordinary.

So, it’s an alliance that helps everybody grow.

Yes. It’s a company where I take pride in my double role as President and CEO. The board is very diverse, and the network management team is fabulous, incorporating all these different nationalities. However, I should point out that, whilst I did lead the organization from the very start, my leadership was informal during the first few years. We reorganized into a corporate structure when we found that Brokerslink’s complexity and scale would inevitably force us to. That’s very much in our DNA.

Earlier you alluded to the topic of being Portuguese.

When Brokerslink came into being we were only five brokers. Not a huge number, so we could debate the matters at hand and reach overall consensus at a table that kept growing. Of course there was an informal leader setting the pace: MDS. We created Brokerslink, led it, and kept it working in a rather open way, fostering a great deal of trust among our members. Early on I thought we didn’t have to formalize that leadership, because I understood that others often underestimated us until they got to know us better. The time to make things formal came when everybody felt right about it. Deciding on leadership was the most natural thing in the world and took all of two minutes. That was how I became the head of the organization formally and still play that role.

Where do you see Brokerslink going? Is there room for more growth?

Brokerslink is a unique, highly original collaborative system that includes insurance brokers from 133 countries, but that’s not the whole picture. Around that core network we have brokers that specialize in certain segments, risk consultancy providers, law firms that specialize in insurance, asset evaluation, claims, captives, and other domains. Growing is no longer a matter of geography. It’s about improving the network now, developing business and partnerships. There’s plenty of room to grow.

How did MDS take its first steps in Brazil?

I joined MDS on 2 January 2000. Fifteen days later, I found myself in Rio de Janeiro, with my colleague José Figueiredo, to try and settle a claim with the IRB (the Brazilian Reinsurance Institute) arising from an event at a factory Sonae Indústria was building in Paraná.

There was a Portuguese gentleman waiting for us, Mr Fernando Nunes. He’d been president of the insurer, Aliança da Baía, and then Sedgwick Brazil, which had been Sonae’s broker up until then, but it got sold to Aon in Brazil later on. So, Fernando Nunes was there to help us with the claim.

We felt an immediate chemistry. Fernando Nunes was an extraordinary man, a giant in the Brazilian market. I learned a lot from him, and I mean a lot.

On that same trip, which took us to São Paulo, we also met with a small broker called Lazam, connected with the Feffer family, who owned Suzano and had strong personal ties with the Azevedo family.

We put two and two together. First of all, we hired Fernando Nunes to help us manage insurance for Sonae’s businesses, then we got to talk with Daniel Feffer and his father, Max Feffer...

And you ended up buying a 45% stake in Lazam.

Yes. In April 2002, MDS acquired a 45% interest in Lazam, and it got rebranded as Lazam-MDS.

Going to Brazil was a giant step, for sure.

It was one of the most important strategic decisions we ever made. Just think. When we got into Lazam, they were selling $R 1.6 million and now they’ve surpassed $R 700 million (including our most recent acquisition D’or Consultadoria).

MDS grew by leaps and bounds. Had you ever imagined the Group would come this far?

My stance is anything is always possible. We push forward as far as we can, fuelled by positive ambition and something of a non-conformist dissatisfaction. Every time we enter a new market we aim to dominate through scale and quality. We’ve grown — not only organically but also through acquisitions. We started out with 20-odd colleagues in Brazil and now there are over 1800 of us. We are, I think, a case study for successful Portuguese investment in that country. In fact, the whole group is a beautiful case study, if you ask me.

Are we still paying attention to new opportunities that may arise?

Brazil is a gigantic market, but still very fragmented. There are loads of opportunities. And we are attractive to teams and other companies, which affords us a great competitive edge. So yes, we’re paying attention and making moves.

Did you follow the Brazilian operation closely?

Well, we’re talking about a massive country, a huge economy — ninth biggest in the world — with all the complexities that entails. I’ve always followed both the operation and the teams very closely, learned to respect the market, and built robust, motivated local teams. Our team in Brazil makes me immensely proud, from the CEO to the Vice-Presidents, not to mention the rest of the gang. Brazil isn’t a market you can manage remotely, especially when you grow.

We’ve discussed MDS’s first acquisition in France, Brokerslink, Brazil, being Portuguese and how that impacts business. But there are other relevant moments in our history. Cooper Gay led us to one, did it not?

We got acquainted with Cooper Gay in 2003 or 2004. The following year, they became our reinsurance broker, helping us place Sonae’s world programme. They weren’t a gargantuan operation, but they delivered top-tier, bespoke services. So, we started discussing the possibility of doing projects together. One day I talked to their CEO, Toby Esser, and we entertained the notion of MDS acquiring a significant stake in their company. I allowed myself to dream. I shared this dream with Mr Belmiro and the notion excited him. Sometime later, we held 32% of the company’s equity.

I suppose the idea pleased him.

If it were up to him, we’d have closed on it the very next day. But it was hard going. We had complex legal issues to tackle, because the English legal framework differs from ours in so many ways. It was a trailblazing operation. But we did close on the deal, and we became their largest shareholder. All the others were Cooper Gay executives. This mattered. It brought MDS major visibility on the world stage.

The Portuguese shopping in London...

Yes, when does that ever happen. Anyway, I joined the Board along with Mr Ângelo Paupério, which meant a great deal, too. I remember when Global AIG CEO, Martin Sullivan, sent me an enthusiastic letter congratulating me. This was a key moment. The largest investment any Portuguese insurance company had ever made outside of our own border. Not an insurer though, a broker. A historical moment for the Portuguese market.

What do you like most about the business? Is it risk management?

What gives me the most pleasure is that insurance is all about people. Insurance means advice, knowledge, it’s a business that makes you meet people from all over the world, with different backgrounds and histories, and all these kinds of risks. As a business, it is deeply intertwined with society and how it evolves, certainly not as commoditized as commercial banking.

So, insurance isn’t a commodity business?

No. It keeps evolving as societies move forward. New risks emerge, like environmental, cyber, and more. If there’s one sector that has a huge impact on society, families and companies, that’s insurance. You can’t have investment without insurance. You can’t even travel without insurance. But I don’t think it gets the credit it deserves. Something extraordinary about insurance — and I don’t think anybody’s ever done the math — is the amount of disbursements the sector gives back to society and the economy. Trillions every year! Consider, let us say, a flood. Insurance will make restitution — but it’ll replace old with new. It repairs ecosystems. Think back to the Twin Towers in New York, on 9/11: the sector liquidated around $60 billion in the space of a year.

Has the approach to risk management evolved over time?

That’s a very important issue. Risk is part of human nature: people go on adventures, they take chances. What’s changed is awareness, risk perception, the degree of risk tolerance. Nowadays we don’t accept the kind of risk we would overlook 40 years ago, because societies evolve.

What are the most difficult kinds of risk to anticipate?

Major risks and threats are floods, fires, extreme events, risks that insurers simulate all the time through their models. The insurance world calls them acts of God, which lie beyond our control. Then there’s cyber risk, which is no longer confined to companies, and political risk. A huge spectrum.

What major innovations has MDS brought to market?

Innovation is a dangerous, overused, and abused word. The word innovation has meant a great deal since I started my corporate career at a fantastic bank, Banco Português do Atlântico. Innovation is a space. It’s a way to stand out, to contribute something. Over the course of its history, especially in Portugal, MDS has been a company others look to. What I mean is, several initiatives we’ve implemented were highly innovative because they elevated us above the crowd, they showed daring — and daring is written into MDS’s DNA. Our first acquisition shows that side of ours. A smallish company in Porto, aspiring to lead the national market, begins by acquiring an internet broker in Paris. Out of the blue, like that. And it would impact the company like nothing ever had. Brokerslink was radically innovative as well.

So is launching mass insurance through widespread distribution. We did that with Seguros Continente, picking up on a European trend. And that project taught us a great deal. And we’re good at digital sales to consumers thanks to that starting point.

We innovated again when we organized the FERMA (Federation of European Risk Management Associations) Forum in Lisbon, in 2005, with APOGERIS (Portuguese Association of Risk and Insurance Management, which I launched in Portugal, with strong backing from MDS).

Investing in Cooper Gay, which I mentioned earlier, was absolutely radical and very meaningful for MDS.

I should also mention HighDome, the captive insurer we established in Malta (Yes, MDS is the single shareholder of an insurer), the launch of the first digital consumer portal in the country in 2011, the first structured wholesale project with MDS Partners and, naturally, FULLCOVER magazine.

Another thread runs through all of the company’s endeavours — sharing knowledge. We also innovated there. FULLCOVER is a good example. How did a group that has nothing to do with communication go into a publishing venture?

I can give you a number of reasons. First of all, we’re nonconformists. We want to stand out. And then you have a responsibility as lead broker in the country. Being a leader means more than being the biggest fish in the pond. You have to find new ways to do things. We felt that the Portuguese market lacked risk and insurance literacy. We’re not in the market exclusively for profit. In our understanding, we had a duty to contribute and improve risk and insurance culture.

That’s what FULLCOVER is about, but it’s also become an essential vehicle for MDS brand awareness. We wanted to go international, so we thought a magazine like FULLCOVER, as important as it was to the Portuguese community, could reveal who we are and want to be outside of Portugal. If anyone wants to know what MDS is like, all they have to do is read FULLCOVER. It shines a light on our DNA: International, open to knowledge, and collaboration with the market. It’s not a propaganda rag, much less a self-aggrandizing vehicle. FULLCOVER gathers contributions from leading international experts, colleagues that make Portuguese executives more visible, whether they work with us or not, and it has developed a project which is now, as people often tell me wherever I go, the best insurance magazine in the world.

But MDS didn’t rest on its laurels. There’s more than just FULLCOVER.

We developed a publishing cluster in the sector. Other lines, such as Faces of Insurance, which puts out profiles on the most remarkable people in the sector, detailing their contribution to the market and posterity. Then we have the Keep it Simple collection, intended to demystify risk- and insurance-related topics.

Beyond that, MDS works closely with cultural organizations. With a scale like ours, we feel it is important to back cultural, sporting, or social responsibility initiatives.

Can you describe the group’s culture in a few words?

A company’s culture is a thing you feel. MDS is open, favours collaboration and puts team spirit before the individual. We have open minds. We’ve always been human-centric, always sought to foster an environment where everybody feels included and enjoys their work. And we started long before all these wellness and work-life balance trends that are now swirling around us.

In 2022, The Ardonagh Group acquired MDS. Why would a giant like that want us?

Let’s separate coincidence from strategy. Once again, we’re looking at historical cycles. We bought Cooper Gay in 2007, and then they merged with an American company, Swett & Crawford, establishing Cooper Gay Swett & Crawford. Cooper Gay Swett & Crawford sold a stake to an investment fund, Lightyear Capital. MDS sold some of its equity, lots of changes happened and, in 2015, Lightyear became the majority shareholder and appointed Steve Hearn as CEO. They rebranded as Ed Broking. In 2016, MDS sold all its shares to a major American fund, BGC, which became the sole shareholder of Ed Broking. A while later, they changed their name to Corant, the company that held Ed Broking, and that was sold to Ardonagh, then led by David Ross.

For Ardonagh, the next step was acquiring MDS, a significant play in their quest for international expansion.

And that’s where the historical cycles come in?

We invested in a London company which, after many twists and turns, came to Portugal to invest in MDS. A beautiful journey.

What about the strategy, then?

MDS was and continues to play a really important role in Ardonagh’s international expansion. Moreover, I’d describe us as “a much-coveted bride.” A lot of companies have shown interest in acquiring MDS over the years.

The sale process, what was that like?

Obviously, the decision fell to our former shareholders, Sonae and Suzano, who sealed the deal in November 2019. The first meeting with the consultant hired for the sale, Bank of America, happened in January 2020. I remember one of the main investors asking me what we thought of the crisis coming out of China (Covid-19) and, at the time, nobody really thought much of it... Both Sonae and Suzano considered a variety of angles: Insurance business was not a primary focus for either of them. MDS as a company enjoyed excellent outcomes, an enviable international reputation, boasted a strong management team and was then diversifying its business and reaching more markets, which demanded investment. It seemed like the right time to sell, in the right frame of mind, and give the company more firepower.

Ardonagh rose to the top of the list. We began meeting in 2021 (the pandemic had slowed the entire process) and then signed the deal on 23 December 2021 (which made for a different Christmas) and completed the acquisition process on 2 December 2022.

What changed for both companies?

Well, we are now a part of a really powerful group that brings us more resources, more knowledge, more products, and solutions. As well as capital for expansion and growth. Our new shareholder kept the team and management together, and maintained the brand, which is quite respectful to this great project that Sonae and Suzano helped us build.

Ardonagh acquiring MDS is the beginning of a great change in the Portuguese broking sector. I think this acquisition showed the market just how valuable Portugal is.

As VP of the Board at Ardonagh International, what is your role?

The international board is a platform where we discuss and steer the Ardonagh Group’s entire international strategy and it pleases me no end to take part in these strategic discussions. It also demonstrates how important the MDS Group is to Ardonagh.

Where do you see the group in 40 years?

I see it as one of the strongest global contenders in distribution, especially across Iberia, Latin America, and Africa, with highly innovative strategies and culture.