From: Captive International
The COVID-19 pandemic has taken a heavy toll on Compass Group, the contract catering business. When the virus struck the company was in the process of overhauling its insurance and risk management strategy, and now an enhanced role for its captives may position it well for future challenges. Captive International spoke to Compass Group’s Scott Feltham.
One of the world’s largest contract catering businesses, Compass Group operates in 46 countries around the world, with a presence in Europe, North America, Latin America and Asia. It generated revenues of £25 billion in the year before the COVID-19 outbreak, with roughly 60 percent of its revenues coming from North America.
The business has been hit hard by the pandemic, with many of the sectors it operates in particularly exposed to the virus-induced slowdown. Compass Group makes around 70 percent of its revenues from sports and leisure, education and business and industry catering, all of which saw dramatic falls in demand when the world’s economies shut down, says Scott Feltham, group insurance manager at Compass Group.
Compass Group was one of the biggest casualties in the Financial Times Stock Exchange index during the lockdown, although its share price has started to recover as economic restrictions have eased.
Younger brokers are arguably not as well-versed on how captives can add value because they have never experienced a hard market before.”Scott Feltham, Compass Group
The business fundamentals, however, are strong. Compass Group has strong relationships with its clients, which include the UK’s National Health Service, as well as other healthcare and defence providers.
“We have a strong balance sheet, which was supported by a £2 billion equity raise in May of this year,” says Feltham.
Compass Group has been trading since 1941, so it is no stranger to crises. In recent years, however, it identified the need to overhaul its insurance and risk management strategy. It was with that in mind that Feltham was hired in 2019, creating a new role that gives him licence to review the business’ insurance needs and recommend changes to make the business more efficient.