Can't get enough of the Blues

profile : Matthew Harding; Paul Rodgers talks to an insurance tycoon about his passion

THERE are two passions in Matthew Harding's life - insurance and football. The first made him a millionaire, the second cost him a fortune. Last week, while he was in America taking care of one, the other exploded behind him. Chelsea Football Club's chairman, Ken Bates, accused him of orchestrating a power grab for the club, leading to cartoons of the duo as Wild West gunslingers or squaring off in a boxing ring.

Harding - who last week resigned from the board of Chelsea Village, the holding company that owns the Blues, while retaining his directorship of the club itself - took the furore calmly. "I'm surprised so much mayhem's gone on in my absence," he said from Boston. "I'm not looking for the hostility and war of words I'm led to believe Ken Bates is after." As for charges of an imminent takeover bid for Chelsea, he said: "One of my life's ambitions is not to be chairman of Chelsea. It all depends on what's in the best interests of the club."

The tale being told on this side of the Atlantic was far less diplomatic. In a series of public bombasts, Bates claimed that Harding was mounting a coup and insisted it would fail. "He has not come up with a single constructive proposal for the long-term future of the club," complained Bates, adding that Harding is "totally unfit to be chairman of this football club".

If there were a coup at Stamford Bridge, Harding, 41, would be the obvious leader. He has the overwhelming support of the fans, who told one tabloid in a straw poll they thought he should replace Bates - and soon. Harding has already ridden to the team's rescue several times in the last two years, buying the freehold on the grounds for pounds 16.5m and pumping in pounds 10m in interest-free loans to finish the new North Stand and pay for player transfers. Calling in those loans would push the Blues to the brink, or beyond, though Harding said he would never do anything to hurt his beloved team. But with an estimated purchase price of pounds 100m, Chelsea remains within his reach.

How he came to have such reach is another story. The enthusiasm in his voice when he talks about Chelsea gives Harding the air of a dilettante obsessed with sport and possessing more money than brains. Nothing could be further from the truth. His rise to power in the City has been almost as meteoric as his rise to prominence in football.

In less than a decade he has taken a sleepy but profitable little maritime reinsurance brokerage at Lloyd's and turned it into one of the most profitable companies in the country. With a staff of just 65, he reported pre-tax profits last year of pounds 32.3m. From modest levels a decade ago, his personal worth has climbed to about pounds 135m, according to the Business Age Rich 500, which ranks him between the Marquess of Northampton and Sir Tim Sainsbury as the 131st most wealthy man in Britain - down, admittedly, from 78th a year earlier. Last year, he earned pounds 3.25m.

Harding's love for football mixes uncomfortably with the staid world of Lloyd's. He reads Chelsea Player by Player in the office. He wears a Chelsea strip to games, changing into a suit before entering the directors' box. He never willingly misses a home game. A few years ago, he was chased by opposing fans while playing away. Not the sort of thing that happens to your average company boss.

The twin threads of Matthew Harding's life stretch back to his father, a cargo underwriter for Sturge, a then small Lloyd's syndicate, who took him to his first Chelsea home game when he was eight. In his teens, boarding at Abingdon in Oxfordshire, he got 10 O-levels and an A-level in Latin, but Chelsea ruled. It was only after he left in 1971 that the lure of the Square Mile began to pull.

His first efforts were at two merchant banks, although he stayed less than a year at each. Then one day in 1973, he met his father for a pint at the Lamb in Leadenhall Market. There he was introduced to Ted Benfield, who was just starting up a new reinsurance brokerage, Benfield, Lovick & Rees. Harding was hired as the firm's 10th, and most junior, employee. "I was the one who did the post and got the coffee."

Most of the 1970s he spent learning the business and becoming one of the main contributors to the company's bot- tom line. Then in 1982 he march- ed into the directors' office and asked whether they wanted him to work for them or with them. They offered him 10 per cent of the company and a seat on the board. When they started to retire five years later, he organised a management buyout, promising his mentors a share of at least pounds 4m in profits for a decade. Since then he has made them far richer.

His new holding company, Benfield Group, quickly shed its non-core activities. The remaining reinsurance brokerage expanded organically into aviation and general catastrophe business. A sound strategy, but not enough to explain pre-tax profits that jumped from pounds 20m in 1991 to pounds 32.3m this year, while shareholders' funds grew from pounds 8.2m to pounds 59.5m. "We move more money more efficiently than most other companies," he claims, with the same pride you hear when he speaks of Chelsea.

The key to Benfield's success is summed up in a phrase from the company's business philosophy - "innovation and a refusal to accept every market standard or practice as sacrosanct". In a world where buyers and sellers are out to shaft each other, Harding broke with the past by developing lasting trust. His clients keep at least 10 per cent of the risk they want to pass on, giving the reinsurers confidence that it is not a ticking time bomb. In return, the primary insurers know that the remaining 90 per cent will be placed.

The second main innovation was to insist on realistic fees and prompt payment. Too many insurance companies make their profits on the interest accrued when they delay payments, either of premiums to reinsurers or of claims to the primary insurers. Some reports say that Benfield can get people to pay in 24 hours, although Harding refused to set a time limit.

Surprisingly, Harding has had few imitators. And with one of the highest- paid workforces in the City, not many of his employees are eager to set up on their own. The lack of copycats may soon end. In March, he established Benfield Re, a joint venture with Rea Brothers Group, the merchant bank, to offer specialist advice to the insurance industry.

His latest venture, launched on Thursday, is the Benfield and Rea Investment Trust, a quoted vehicle, advised by Benfield Re, that will invest primarily in corporate Names. An even more dramatic departure from the firm's past strategy is its first acquisition. A possible takeover of Ellinger Heath Western, another small brokerage, is currently in the works. Talks are expected to lead to an agreed price of around pounds 20m within the next month.

Harding is cagey about wheth- er his next target will be Chelsea Village, the holding company that owns the Blues. He says he has no plans now, but will not rule out the possibility. Despite sitting on its board until his resignation last week, he owns no shares in the club. He refused to convert his loan stock into equity because of the company's mysterious share structure. While Bates owns 30 per cent, he speaks for most of the rest through offshore nominee companies. "I'd have had a minority stake in a private company whose shareholders I didn't know," said Harding. A scrap at Stamford Bridge would be far different from what he's used to on Lime Street, however. Despite the support of the fans, he could have a tough time persuading Bates and his backers to sell up. The opposition has already been more vitriolic and personal than anything seen in ordinary takeover battles. And while Harding is a dab hand in the insurance market and a knowledgeable Chelsea fan, the business of football is a game in which he is still a rookie.

Start your day with The Independent, sign up for daily news emails
Sport
The Queen and the letter sent to Charlie
football
Arts and Entertainment
Eurovision Song Contest 2015
EurovisionGoogle marks the 2015 show
News
Two lesbians hold hands at a gay pride parade.
peopleIrish journalist shares moving story on day of referendum
Arts and Entertainment
<p>
<b>Kathryn Williams</b>
</p>
<p>
When I was supporting Ray La Montagne I was six months pregnant. He had been touring for a year and he was exhausted and full of the cold. I was feeling motherly, so I would leave presents for him and his band: Tunnock's Tea Cakes, cold remedies and proper tea. Ray seemed painfully shy. He hardly spoke, hardly looked at you in the face. I felt like a dick speaking to him, but said "hi" every day. </p>
<p>
He was being courted by the same record company who had signed me and subsequently let me go, and I wanted him to know that there were people around who didn't want anything from him. At the Shepherds Bush Empire in London, on the last night of the tour, Ray stopped in his set to thank me for doing the support. He said I was a really good songwriter and people should buy my stuff. I was taken aback and felt emotionally overwhelmed. Later that year, just before I had my boy Louis, I was l asleep in bed with Radio 4 on when Louis moved around in my belly and woke me up. Ray was doing a session on the World Service. </p>
<p>
I really believe that Louis recognised the music from the tour, and when I gave birth to him at home I played Ray's record as something that he would recognise to come into the world with. </p>
booksKathryn Williams explores the works and influences of Sylvia Plath
News
Liz Kendall played a key role in the introduction of the smoking ban
newsLiz Kendall: profile
Life and Style
techPatent specifies 'anthropomorphic device' to control media devices
Voices
The PM proposed 'commonsense restrictions' on migrant benefits
voicesAndrew Grice: Prime Minister can talk 'one nation Conservatism' but putting it into action will be tougher
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?