Strengthening FX Resilience for a Fast-Growing Insurance Firm: Case Study

Rapid growth and increasing international revenue can introduce significant FX exposure. This case study explores how Marex supported a fast-growing insurance firm in strengthening FX resilience, improving governance, and safeguarding margins. 

 

Overview

Founded in 2019, this specialist insurance firm began in marine insurance before expanding into property, aviation, and casualty. Rapid growth recently attracted private equity investment, and as revenue increasingly came from US dollars, the company needed a strategy to manage its growing exposure to currency fluctuations. 

The team engaged Marex to implement a strategy that would mitigate FX risk and support continued expansion into international markets. 

 

Client challenges and FX exposure

Managing US Income Streams

Exposure to volatile GBP/USD exchange rates (from $1.40 down to $1.03 since inception) impacted financial forecasting and planning.

Financial stress from fluctuating margins

Increased USD income created tension and diverted resources from core operations.

Unpredictable USD cash flows

Overseas exposure became harder to manage, creating budget uncertainty.

 

FX strategy and proposed solution

The company was seeking more than a transactional solution – they needed strategic guidance and a deep understanding of their business. Marex led a consultative process to develop a tailored FX risk management strategy, identifying a target hedging ratio of 60-70% of US dollar revenue. Key measures included:  

• Hedging execution
  Locked in a rate of $1.25 against a budget assumption of $1.40, generating FX gains from day one 

• Value beyond execution 
  An annual FX report was incorporated into board packs, improving governance perception among stakeholders. 

• Integration of MIRA – technology-enabled insight 
  Marex’s proprietary FX risk analysis platform identified coverage gaps, modelled exposure, and produced board-level reports.

 

Results and outcomes

Implementing a dynamic FX strategy delivered measurable outcomes:  

• Immediate FX gain
  Improved budget forecasts through better rate locking 

• Strengthened balance sheet
  Enhanced ability to forecast future USD income 

• Increased boardroom confidence
  Governance improvements appreciated at board level  

• Strategic credibility
  Positioned the business for long-term growth  

• Reduced operational stress
  Less pressure on leadership and finance teams  

• Private equity alignment
  Proactive FX strategy impressed stakeholders during due diligence

 

Key takeaways

More than transactional

Marex worked closely with the client, taking a proactive approach to FX risk management after a detailed consultative process.

Cutting-edge technology with human oversight

Marex combined proprietary tools with expert guidance to deliver a reliable and effective solution.

Strengthening broader governance

While the financial benefits were immediate, a greater level of control strengthened the group’s wider governance, predictability and stability. 

Supporting the client through critical growth milestones

The ability to secure fixed exchange rates was crucial to long-term growth and the eventual acquisition by private equity investors.

Realistic approach to FX exposure

Having previously budgeted for a rate of $1.40 to the pound, fixing up to 70% of future dollar income at $1.25 created a more realistic approach to FX exposure and long-term income.  

Boardroom confidence

Utilising the MIRA FX risk management platform improved confidence and strengthened relations with company directors.  

 

Conclusion

After years of navigating volatile currency markets with limited protection, the company recognised the need for a structured FX strategy. Marex’s approach not only delivered clarity and control but also enhanced financial stability and governance. 

With a clear framework and board-level reporting, the business is now well-positioned to pursue growth without compromising financial resilience. 

As the founder and managing director told us: