INSURANCEBUSINESS.CO.UK ISSUE 1.03 | £14.99
YOUNG GUNS GENERATION NEXT: THE HOTTEST NEW TALENT IN THE INDUSTRY
ELECTRIC DREAMS How to sell the most hyped new product: cyber insurance
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THE RICH KIDS
What high net worth millennials expect from their brokers
RISKY BUSINESS Informing clients of the dangers of underinsurance
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It’s a risky business choosing the right insurance partner. Choose Ageas for extensive choice of Personal and Commercial products access to specialist underwriters
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For information about our Personal and Commercial products please call your Ageas Account Executive or visit ageasbroker.co.uk
Your Partner in Insurance.
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OCTOBER 2016
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CONTENTS
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UPFRONT
04 EDITOR’S LETTER The youth of today
06 STATISTICS
FEATURES
YOUNG GUNS 2016 COVER STORY
SETTING SUMS
How the vote has affected the UK insurance industry
12 INTELLIGENCE
26
14 MGAs UPDATE
Dealing with all the new players in the MGA market
16 TECHNOLOGY UPDATE
FEATURES
38
DIGITAL AGE
How to sell the hottest new product in town: cyber insurance
Blockchain’s revolutionary potential for pay-for-use insurance
21 OPINION
Brexit’s effect on the MGA sector
FEATURES 22 TRAVEL INSURANCE
With more people heading overseas, sufficient cover is more vital than ever
42 BROKER PROFILE
Ben Beeson of Lockton Companies tackles cyber threats
Down on the farm with Debbie Airey of Country & Commercial
18
PEOPLE 47 CAREER PATH
FEATURES
44
THE RICH KIDS
What the new generation of high net worth individuals expects from its brokers
2
Diversity and inclusion in the workplace
New products, from Brexit cover to Pokémon – catch ’em all here!
The cream of generation next who are revitalising the whole insurance industry
INDUSTRY ICON
08 HEAD TO HEAD
10 BREXIT: WHAT NEXT?
Getting over the message about the perils of underinsurance to clients
YOUNG GUNS 2016
PEOPLE
24
The threat of climate change to investment portfolios
David Newman plots his path to the top of the industry … and the top of the world
48 OTHER LIFE
A model example of a high achiever
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UPFRONT
EDITOR’S LETTER
Faster, higher, stronger, younger
W
e’ve all seen the statistics about the average age of workers in the UK insurance industry. Indeed, most of us have probably nodded our heads politely while listening to the rhetoric about how we need more young people in the sector. However, as long as the bottom line on our balance sheet still looks good at the end of the year, is there really any need for change? Sadly, when it comes to adjusting the status quo, most of us would rather stick with what we know – and the irony is that we’re ignoring the future because we’re not learning the lessons of the past. Take, for example, Kodak. The dominant player in the photographic market invented digital photography back in 1975 and even brought its first digital camera to market in 1995, years before most of its competitors. However, it was so entrenched in the film business that it was slow to rev up its push. As a result, it was quickly left behind and plunged into temporary bankruptcy. Or what about Friends Reunited, the first social network to earn prominence in the UK? Though once ahead of the game, its business model stood still and it was mercilessly crushed by Facebook.
“Whatever you do in life, surround yourself with smart people who’ll argue with you” They – and countless others – are the proof that even if you are satisfied with standing still, others will not be. The motto of the Olympic Games is: “Faster, higher, stronger.” World records are always broken because every generation advances on the one before, and this is just as true in business. Business should always be about growth – not just about survival. To achieve that growth we must always be willing to listen to something new and to embrace the next generation; not because it’s company policy, but because we see the value it can bring. Revered US basketball coach John Wooden wrote: “Whatever you do in life, surround yourself with smart people who’ll argue with you.” The young people celebrated in this issue of Insurance Business UK are exactly that – they are the people who will challenge you, make you think outside the box and, ultimately, make you and your business better. That is, if you’re willing to let them. Changing the insurance industry doesn’t start with a graduate programme. It starts with an open mind.
The team at Insurance Business UK
www.insurancebusiness.co.uk OCTOBER 2016 EDITORIAL Editor Paul Lucas Journalists Callum Glennen, Heather Turner, Libby Macdonald, Tim Garratt Editorial Researcher Hannah Go Production Editor Bruce Pitchers
CONTRIBUTORS Tim Baker, Sian Fisher, Marcus Seeger
ART & PRODUCTION Design Manager Daniel Williams Designer Joenel Salvador Production Manager Alicia Salvati Traffic Manager Kay Valdez, Lou Gonzales
SALES & MARKETING Vice President of Sales John Mackenzie Business Development Manager Jonathan Connelly Sales Manager Dane Taylor Mktg & Comms Manager Lisa Narroway
CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Managing Director Tim Duce Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil
Editorial Inquiries editor@insurancebusiness.co.uk Subscription Inquiries subscriptions@keymedia.com Advertising Inquiries jonathan.connelly@keymedia.com
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UPFRONT
STATISTICS
The other threat of climate change What is the industry doing to minimise the threat of climate change to investment portfolios? Not much FOR THE insurance industry, the threat of climate change is twofold: claims related to the physical impact of weather extremes, and the risk it poses for the investment portfolios that enable insurers to meet claims. A word of warning came from the Governor of the Bank of England and chairman of the International Financial Stability Board, Mark Carney. In his ‘Tragedy on the Horizon’ speech to the insurance industry, he said investors ran
24%
0.2%
of European insurers identify low-carbon investments
of insurance assets (US$30bn) are identified as low-carbon investments
A WORLD OF DIFFERENCE European insurers are faring better than their American and Asian counterparts in terms of climate change preparedness; of the 14 companies found to be taking quantifiable measures, 11 (blue) are in the EMEA region. Most of the worst ‘laggards’ (red) are in the Asia region.
the risk of “potentially huge” losses as a result of climate change. The Global Climate 500 Index for 2016 identifies companies worldwide best protecting themselves against the risks of climate change. Of 116 insurers surveyed for the index, only 14 were found to be taking quantifiable measures to minimise climate change impact on their portfolios ( just one ‘leader’, two ‘challengers’ and 11 ‘learners’).
0.8%
of the average insurer’s portfolio is invested in low-carbon investments
USA MassMutual (Insurance) AUM: US$139bn New York Life Insurance Company AUM: US$230bn Hartford Financial Services Group Top insurance ranking: 8 Overall ranking: 79 AUM: US$73bn Prudential Insurance Top insurance ranking: 13 Overall ranking: 93 AUM: US$420bn
5%
2016 AODP Global Climate Insurance Top Performers 2016 AODP Global Climate Insurance Largest Laggards
of insurers measure portfolio carbon emissions
Source: Insurance Sector Analysis, Global Climate 500 Index 2016, Asset Owners Disclosure Project
LACK OF EXPERTISE
LEADERS AND LAGGARDS
Only 8% of insurers have an internal role dedicated to integrating climate change risk into the investment process, and just 3% support climate-change-rated shareholder resolutions.
European insurers set the standard when managing the risks of climate change in their investments. Meanwhile, half of Asian insurance assets – US$2.5trn – are managed by ‘laggards’, while three in five American insurers are ignoring climate risk.
Leaders 1 Challengers 2 Learners 8 Bystanders 27 Laggards 13
10% 8%
8% 6% 4% 3%
2% 0%
Proportion of insurers with role/team integrating climate change risk into investment process
Proportion of insurers supporting climate-change-rated shareholder resolutions
Source: Insurance Sector Analysis, Global Climate 500 Index 2016, Asset Owners Disclosure Project
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Leaders and laggards by region... EMEA
...and their AUM (US$bn) EMEA Leaders 445 Challengers 1,337 Learners 1,346 Bystanders 3,757 Laggards 730
Asia-Pacific
Americas
Leaders 0 Challengers 0 Learners 1 Bystanders 14 Laggards 12
Asia-Pacific Leaders 0 Challengers 0 Learners 122 Bystanders 2,083 Laggards 2,501
Leaders 0 Challengers 0 Learners 2 Bystanders 13 Laggards 23
Americas Leaders 0 Challengers 0 Learners 493 Bystanders 1,547 Laggards 954
Source: Insurance Sector Analysis, Global Climate 500 Index 2016, Asset Owners Disclosure Project
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NORWAY
BELGIUM
Storebrand ASA Top insurance ranking: 12 Overall ranking: 90 AUM: US$44bn
SWEDEN
Ageas AUM: US$117bn
Folksam Group Top insurance ranking: 7 Overall ranking: 74 AUM: US$45bn
NETHERLANDS
GERMANY
Achmea Holding Top insurance ranking: 14 Overall ranking: 96 AUM: US$50bn
China Life Insurance AUM: US$357bn
Allianz Group Top insurance ranking: 3 Overall ranking: 51 AUM: US$744bn
UK
FRANCE
Aviva Insurance Top insurance ranking: 1 Overall ranking: 22 AUM: US$445bn
AXA Group Top insurance ranking: 2 Overall ranking: 40 AUM: US$592bn
Old Mutual Group Top insurance ranking: 5 Overall ranking: 67 AUM: US$149bn
MAIF Top insurance ranking: 6 Overall ranking: 72 AUM: US$18bn
Standard Life Group Top insurance ranking: 11 Overall ranking: 88 AUM: US$233bn
Credit Agricole Assurances Top insurance ranking: 9 Overall ranking: 81 AUM: US$367bn
CHINA People’s Insurance Company of China Top insurance ranking: 4 Overall ranking: 59 AUM: US$122bn
Talanx AUM: US$119bn
JAPAN Japan Post Insurance (Kampo Seimei) AUM: US$602bn
TAIWAN
Nippon Life Insurance Company (Nissay) AUM: US$438bn
Chunghwa Post AUM: US$205bn
Zenkyoren (JA Kyosai) AUM: US$436bn Sumitomo Life Insurance Company (Sumisei) AUM: US$226bn
CNP Assurances Group Top insurance ranking: 10 Overall ranking: 87 AUM: US$440bn
Source: Insurance Sector Analysis, Global Climate 500 Index 2016, Asset Owners Disclosure Project
COMPETENCY BY REGION
POOR OVERALL PERFORMANCE
Insurers in the EMEA region are ahead in all three competencies – engagement, risk management, and low-carbon investment – while those in the Americas score lowest for both engagement and low-carbon investment. EMEA Asia-Pacific Americas
The very low overall scores for insurers globally across all three competencies seem to indicate that insurers have barely come to terms with climate risk.
5%
5%
5%
4%
4%
3%
3%
Insurers’ average score for risk management
4.4%
4% 2.9%
3% 2.1%
2%
2%
1.6%
1% 0%
2%
0%
1%
1%
Engagement
Risk management
Lowcarbon investment
0%
Engagement
Risk management
Lowcarbon investment
0%
3%
2% 0.8%
0.7% 0.4%
0.1%
2%
Insurers’ average score for engagement
1.2%
1%
1%
Engagement
Risk management
Lowcarbon investment
Source: Insurance Sector Analysis, Global Climate 500 Index 2016, Asset Owners Disclosure Project
0%
1%
2%
3%
Insurers’ average score for low-carbon investment
2% 0%
1%
2%
3%
Source: Insurance Sector Analysis, Global Climate 500 Index 2016, Asset Owners Disclosure Project
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UPFRONT
HEAD TO HEAD
Diversity and inclusion – is it just lip service? Have diversity and inclusion initiatives been all talk and not enough action?
Sally Bramall
Matthew Fosh CEO Novae Group
Director LMA Academy and Market Talent Development
“It’s unfair to say that D&I is all talk and no action, but no one doubts we need more tangible evidence of its positive impact. “Sustainable D&I in practice is more than gender, colour of skin and religion; it’s a slow burn to win around time-poor managers to see that inclusive workplace cultures benefit them too. “But acknowledging that stress, age and caring commitments are part of D&I is helpful – exciting too. Our merger – Willis Towers Watson – has shown the immense power of bringing together colleagues with different perspectives and backgrounds for the benefit of our clients, both as a firm and as an industry.”
“All talk would have been fair comment a year or two ago when it came to D&I, because as an industry we simply hadn’t talked about its business benefits enough. “But there has been a sea change in the past year or two, and we are hoping for a further wave of progress this year on the back of September’s global Dive In festival. “Sessions like the one last year with Marcus Trescothick on mental health connect with so many people who wouldn’t otherwise understand the breadth and relevance of the D&I rationale for more inclusive workplaces.”
“There are pockets of activity to improve D&I but certainly not enough. Those who are trying to implement changes within their own businesses often lack visibility. “The business case for D&I is what convinces people that it’s worth investing in, so we need more companies to share what they are doing and how it will positively impact their bottom line. “There is reticence to claim success without hard data to back it up, but I’d rather see more role models and case studies with that caveat than wait for perfection and lose the opportunity to learn from each other.”
COO, Financial Institutions Group Willis Towers Watson
Charlotte Myers
LACK OF DIVERSITY COSTS According to the UK Council for Access and Equality workplace discrimination can be expensive: for example the highest award from a sex discrimination claim totalled £422,366 (although the average award for such a claim is £19,499) while the corresponding figure for age discrimination claims is £48,710 (with an average claim award of £10,931). What is apparent is that there is a long way to go: the gap between full- and part-time men’s and women’s hourly rates of pay is 22%; people with a disability or long-term illness are over twice as likely to face bullying or harassment in the workplace as non-disabled people; and people from ethnic minorities and religious groups are significantly less likely than average to be in work, and when in work are paid significantly less than average, and this could be worth £8.6bn a year to the UK economy.
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UPFRONT
NEWS ANALYSIS
Brexit: Hold your nerve As the initial storm around not of the shock UK referendum vote dies down, what do we know so far about the future of the insurance industry? FRIDAY MORNING, 24 June 2016: the morning after the night before. As then prime minister David Cameron announced his resignation to a British public still reeling from a 51.9% to 48.1% leave vote that they had – at least in majority terms – concocted, the reality began to sink in. Things would never be the same again. Or would they? Fast-forward several months and, other than a government shake-up, things appear to be very much as they were. Recent reports suggesting it may not be until the back end of 2017 that the various negotiations are finalised for Britain to actually make its exit
Australian insurance group QBE, for example, saw its profits slump by 46% and pointed its finger at falling bond yields prompted by the UK’s decision to leave the EU. Lloyds Bank was another, among several, to announce lower insurance income for the period - its CEO António Horta-Osório said a “deceleration of growth seems likely” as Brexit creates further economic uncertainty.
The long-term concern The major concern for the insurance sector going forward, meanwhile, appears to revolve around future legislation. “The UK as a whole and the insurance
“We need to make sure the various civil justice reforms and other political programmes under way aren’t derailed” Neil Freshwater, UKGI chief financial officer, Zurich from the European Union. So what, if anything, have we learned about how Brexit will impact on the insurance sector?
The instant reaction In mid-August major insurers released their financial results for the first half of 2016 and Brexit was on the tips of the tongues of the majority of those who found themselves explaining disappointing numbers.
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industry in particular will want to retain access to the EU market,” said Charles Portsmouth, director of Moore Stephens. “We are still part of a global economy and in order to preserve lucrative ties and be able to sell cross-border, UK-based insurers are likely to find they still have to comply with EU regulation. “The future of our current EU passporting rights and their use by non-EU companies,
through their London-based European HQs, to access the EU market will be of prime concern.” On the question of EU regulations, Andrew Dunkerley, marketing director of Be Wiser, is more specific: “The UK government may take the opportunity (post-Brexit) to review items such as IPT and FCA regulation” he said. “Any such actions arising from these would have an impact across the whole insurance market.” When it comes to passporting rights, many assumed that the UK could simply follow the same model as Switzerland. British Bankers’ Association chief executive Anthony Browne outlined that Switzerland’s trade deals with the EU allow some sectors, including insurance, full two-way access to the single market as long as its regulation is kept at a similar level to that within the bloc. However, in a blog written to the Financial Times, Professor David Howarth of the University of Luxembourg put this claim
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IMPORTANCE OF UK INSURANCE INDUSTRY First The UK has the largest insurance and savings industry in the EU. Third The UK insurance and savings industry is the third largest in the world. £1.9 trillion The total investments managed by the industry. £29 billion UK insurers’ contribution to UK GDP. £12 billion The contribution the industry makes in taxes to the UK economy. under question. His statement is that there is no such deal for Swiss life insurance and while there is a sectoral agreement on non-life insurance it is not a trade deal and does not
The hope The vast majority of statements issued postBrexit have had a common theme – that a wait-and-see approach must be adopted.
334,000 The number of people employed in insurance in the UK alone. Source: Association of British Insurers 2015
“We do not see Brexit changing the way our insurers conduct business or the way that the public obtains insurances” Andrew Dunkerley, marketing director, Be Wiser grant passporting access. Confusion, it seems, still reigns supreme, and Neil Freshwater, UKGI chief financial officer at Zurich, stressed the importance of clarity and minimal disruption. “What we need to make sure of is that the various civil justice reforms and other political programmes that are under way aren’t derailed or postponed as a result of the process of completing Brexit,” he said.
However, as the initial shock dies down it appears calm is settling over the sector. “It is too early to say what the longer-term impacts will be, given we do not yet know the timing or nature of Brexit negotiations and the outcome,” said Freshwater. “However, the UK insurance industry has been around hundreds of years longer than the EU, so I’m sure it’ll weather any storm.” There is a belief, it appears, in the strength
of the UK insurance market and in its importance on a global scale. “It is important to remember that Britain is still an EU member; it will remain one for many months yet and will likely retain access to the EU market with a new trade deal in the longer term,” said Tom Reed, partner at Moore Stephens. “Yes, there is huge uncertainty for the UK as a whole and the insurance industry is not immune to it. However, the UK is still a major global economy. “There is no need to panic at this stage. In fact, jumping into things can prove costly and not necessarily helpful, if not downright harmful.” In other words, when it comes to Brexit, hold your nerve.
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8/09/2016 4:20:03 AM
UPFRONT
INTELLIGENCE CORPORATE ACQUIRER
TARGET
PRODUCTS COMMENTS
Jardine Lloyd Thompson
Olsa Re
Based in Peru, Olsa Re has 30 years’ experience covering aviation and cargo sectors
Verastar
Octopus Group
Verastar provides essential services to small businesses. This acquisition is its first step into insurance
Randall and Quilter Investment Holdings
Agency Program Insurance Company
The £1.4m deal is expected to boost R&Q’s balance sheet with legacy insurance assets
AMTrust
Arc Legal Assistance
AMTrust is growing in the legal expenses field, and is expected to continue that trend with this acquisition
Bluefin
Osbornes Insurance Oxford
This latest move from Bluefin is designed to expand the company’s presence in the Oxford area
Bennett Christmas
Southwater Insurance Services
Bennett Christmas gets £1.2m in gross written premium as part of the deal
ROW OFFERS ‘POKÉDEX’ COVER FOR PLAYERS
Keeping on top of the latest trend, Bournemouth-based Row Insurance has launched an insurance product for Pokémon GO players. It’s really just a cleverly branded mobile phone insurance policy, but it will cover any problem a budding Pokémon trainer might get themselves into. It will cover accidental damage, cracked screens, liquid damage and mechanical faults. Lost or stolen phones will also be replaced within 24 hours. Row said the game, which has people wandering the real world looking for virtual monsters, will lead to more dropped and damaged phones.
CARE SECTOR SCHEME LAUNCHED BY BIBA
VERASTAR ENTERS MARKET WITH ACQUISITION
A provider of essential services to small businesses, Verastar has entered the insurance market with the acquisition of the Octopus Group, and subsequently The Insurance Octopus. Verastar is estimated to provide services such as gas, water, telecommunications and internet to 9% of the UK’s small businesses. Kevin Norton, CEO of The Insurance Octopus, said the brokerage is excited to be joining forces with Verastar. “We now have a unique multi-service proposition, which will delight our current customers and provide a step change to our business growth going forward,” he said.
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The British Insurance Brokers’ Association has partnered with Bollington Insurance to launch a care sector scheme that allows smaller brokers access to a usually difficult to reach market. In the past brokers would traditionally have to commit a large amount of business to work with insurers in the care sector, but BIBA’s head of technical services Mike Hallam said this allows brokers even with only one care home on their books to write business. The policy covers areas such as residential care, supported living homes and adoption agencies.
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BREXIT INSURANCE ADDED ON BY AIG
AIG is launching a new insurance solution for executives should they need to relocate following the Brexit vote. The product is an add-on to AIG’s directors and officers liability coverage, and will cover the costs of a legal challenge should an EU national’s application for residency be rejected. It will also cover the costs of challenging a repatriation order. AIG’s chief executive for the UK and European business said the product will be added to policies for no extra cost, and should provide additional peace of mind.
PROTECTIVITY UNVEILS SPORTS CLUBHOUSE COVER
Specialist insurance provider Protectivity has launched a product for sporting clubhouses. Sports Clubhouse Insurance offers standard liability cover, but will also provide cover for equipment damage, business interruption, loss of licence, third-party injury and general property damage. Commercial director at Protectivity Andy Brownsell said the policy should provide cover to organisations who are usually dependent on volunteer and charity support to cover maintenance costs. Sports clubs also have wider risks than the average building and need cover for facilities such as goalposts and pitches.
GAP INSURANCE LAUNCHED BY JACKSON LEE
Responding to changes in regulations prompted by the Financial Conduct Authority, Jackson Lee Underwriting has partnered with Bluefin Network to develop a guaranteed asset protection (GAP) product. Traditionally sold to vehicle owners at the point of sale, the new product has been designed so brokers have a competitive product they can offer to their clients. The cover is designed to fund the difference between the price of a new car and the value an insurer will pay out should the car be written off. Jackson Lee has also launched learner driver cover.
PEOPLE NAME
LEAVING
JOINING
NEW POSITION
Kadidja Sinz
XL Catlin
Liberty Mutual Insurance
Head of Europe
Valerie Dias
Visa
Hastings Insurance Services
Board member
Paul Kedney
Aegis London
Sompo Canopius
Chief commercial officer
Ryan Roberts
n/a
H&H Insurance Brokers
Associate director
Neil Pearce
RKH Specialty
Towergate
Managing director
Louise Hopkins
Allianz
Covéa
Reading branch manager
Matthew Ford
Prudential
Willis Towers Watson
Director
Lindsay J’afari-Pak
n/a
PwC
UK insurance tax market leader
Simon Fragiacomo
XL Catlin
ANV
Professional lines underwriter
Evelyn Bourke
n/a
Bupa
CEO
Laurie Banez
Argo Pro
Sompo Canopius
Head of US financial and professional lines
Michael Kessler
n/a
Chubb
Vice president and chief reinsurance officer
Neil Fitton
Aviva
NIG
Underwriting manager for the Thames Valley and East Anglia region
Kieran Angelini-Hurll
Miller Insurance Services
Cooper Gay
Chief executive officer
SINZ TAKES EUROPEAN HEAD ROLE
There is a new head of Europe at Liberty Specialty Markets, part of Liberty Mutual Insurance Group – and in what appears to be an encouraging trend in the industry, the position has gone to a female. Kadidja Sinz has been named head of Europe for LSM and will be responsible for leading and directing the specialty and commercial insurance business across continental Europe. She has built a sterling reputation in the insurance industry, having previously worked at XL Catlin as country manager in France and regional operating manager for Europe. Previously, she has worked for AIG, ACE and Chubb.
FORD TO WILLIS TOWERS WATSON
Prudential executive Matthew Ford has been recruited to Willis Towers Watson to lead the company’s life consulting practice in the UK. Now holding the position of director at Willis, Ford will lead and develop the company’s capital and risk management solutions. He had previously been at Prudential for 12 years. “Solvency II is forcing insurers to optimise their balance sheet and manage its volatility at a time when other factors – including pensions freedom and digitisation – are causing them to adapt their business models,” Ford said, signalling areas he plans to focus on at the business.
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UPFRONT
MGAs UPDATE
New solution or new problem? The MGA market is awash with new players, but do brokers think about who they are really dealing with?
the ‘broker with a limited binder’ end of the spectrum or if they are truly the underwriters. Who makes the claims decisions? There is a big difference – it doesn’t always matter but the broker needs to understand where the value in the chain is and where the cost is.” According to Webb, it’s equally vital that brokers stop and ask questions about the MGA’s capacity providers and their security
“The broker needs to understand where the value in the chain is and where the cost is”
In theory, competition in any marketplace should be a good thing for those on the receiving end of a product or service. More choice typically drives down costs and forces the existing market players to shake up their services and offer better deals. However, when it comes to the MGA market there is an important point that brokers may sometimes overlook – stop and think about who you are actually dealing with. That comes from Richard Webb, director of Manchester Underwriting Management,
NEWS BRIEFS
who is concerned that not all brokers may consider their markets as often as they should. “A number of brokers this year keep saying the same thing – there seems to be more MGAs than ever across a number of classes, with lots of new start-ups appearing,” he said. “However, for a broker this makes it really important to understand what you’re getting from an MGA, because it’s a broad term that isn’t clearly defined. Ask for evidence of their authority from the insurer and that they have risk transfer. Understand whether they are at
FCA exposes potential misselling
The Financial Conduct Authority has claimed it has found widespread cases of a lack of insurer supervision of external salespeople. After sampling 15 firms, it found more than half were unable to demonstrate they were managing the risks presented by these salespeople, known as appointed representatives, including evidence of misselling. The FCA has taken early intervention against five of the firms, with two asked to cease sales. Jonathan Davidson, director of supervision for retail and authorisation at the FCA, said there was potential for customer detriment.
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– questions such as: are they in the UK, and are they rated? He also believes it’s vital to consider the experience of the MGA’s staff. Of course, it’s not just brokers that should be careful with new MGAs – new MGAs need to be cautious with brokers, too. “If you’re a new MGA, you can differentiate yourself in a number of ways; we do it on quality products, service, reputation and building our brand,” said Webb. “However, I remember what it was like in those early years – it was a lot of hard work seeing brokers and delivering the service that you’ve promised. “If you’re a new company and you want your name known, one way of getting quick growth is to be the cheapest game in town and to always say yes. But that’s short term. New markets often get tested with difficult cases at first, and sometimes an MGA has to say no.”
Communication and transparency on MGAA agenda
Managing General Agents’ Association chair James Gerry addressed 430 delegates at the organisation’s second annual conference in July, citing communication, transparency and the potential impact of the Brexit as areas of focus for the coming year. “We may not always agree with our regulator as to the best and most effective means to bring about greater transparency, but let’s not confuse that with the opportunities a collective commitment to openness and accountability can afford the MGA community,” Gerry said in his opening remarks.
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Q&A
Making every link stronger Catherine Bell Chairman inet3
Fast fact Bell is also on the board of the Managing General Agents’ Association is chairman of the MGAA Membership and Benefits committee.
What is inet3 doing to set itself apart? It’s all about investment for us. Investment in technology, relationships and education. Those are the fundamental things we believe can set us apart if we get the formula right. Our own technology platform has been a huge investment from us as a business, but what it has delivered is a very speedy, accurate and manageable system. Most importantly it’s also auditable by our insurer partners. We can make sure the way we engage in business is above board, very efficient and very compliant. On top of that, the learning hub has meant that we’re investing in the education angle, not just for our own teams but we’re sharing insight of everything we do with our broker partners. If we share what we know, that means the customer benefits. When brokers can help the customer in a very clear, concise and correct format, that means the client feels that they’re getting the expertise they need. The communication between us and our brokers and the sharing of knowledge, having faith and confidence in each other, is very much helping everyone through issues like the Insurance Act and new developments in the sector.
How is the MGA sector currently evolving? There has been a lot of M&A and consolidation activity over the last few years, which has led to several larger businesses being formed who are focusing on the sector and investing in MGAs to get access to distribution. I think the main attraction
Castel appoints binding authority manager
Mark Sambridge has been hired by Castel Underwriting for a newly created binding authority role. The role was created so Sambridge could oversee the development, management and governance of all Castel’s binding authority arrangements. Sambridge has 27 years’ experience in the Lloyd’s market. “Mark’s appointment is in direct response to the continued success and growth of our MGA formation platform,” said Castel CEO Mark Birrell. “This new role will form an integral part of our business, ensuring the smooth operation of the binding authority process.”
of this strategy is the expertise in specialisms and loyal client bases, which have built strong relationships. Technology development in our space is expanding with many new platforms and IT offerings being available to start-ups, encouraging new ventures and investment. Combined with more capacity and insurers engaging with their MGA partners, the MGAA has helped encourage that engagement and has offered a community of suppliers and market practitioners who are part of the formula of activity and growing businesses. I believe this creates opportunities to be entrepreneurial and creative by allowing those relationships to be more accessible. Inet3 has always felt supported being members of the MGAA, and even more so being based outside London. It has helped us keep up with the issues that are fundamental to our sector.
Why is education critical to the success of MGAs? Professionalism and education in our sector is pivotal to client confidence and insurer confidence. Strong, knowledgeable relationships with each other, setting the bar high, ensuring clients are getting exactly what they need. It makes sure all people in the chain – insurer, MGA and broker – are performing at a similar level of knowledge and expertise. This is why our learning hub for brokers and their teams is a key investment in education. If you’ve got three people between insurer and client, you want to make sure that every one of those people is a strong link.
Bluefin Underwriting creates farm products
Looking to upset NFU Mutual’s dominance in the farm insurance market, Bluefin Underwriting has launched two new agricultural products: farm combined and farm motor. Farm combined provides cover for property, home, liability, livestock environmental impairment and revenue. Farm motor covers all farm vehicles under one policy. “With these products, we continue to display our expertise as a specialist underwriter focusing on our key strengths, one of which is farming and agriculture,” said Paul Drake, head of Bluefin Underwriting.
Euna opens new office Specialist managing general agent Euna has opened a new office in Chelmsford dedicated to its motor trade business. The office is the first outside London for the company.“We chose to locate our motor trade team in Chelmsford so we can access the local underwriting talent as we grow,” wrote motor trade underwriting manager Dan Body in a blog. Body will be joined be Chad Letherbarrow and new hire Alana Galbraith.“Alana’s appointment is a perfect example of the underwriting experience available here,” wrote Body.
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UPFRONT
TECHNOLOGY UPDATE NEWS BRIEFS 8 in 10 insurers to invest in new technology
According to a new survey conducted by IT service provider Redcentric, 82% of insurers are planning to invest in new technology over the next year. The investments are reportedly to address business challenges, with 45% of firms citing improving customer experience as the main force driving new investment. It’s a balancing act, though, with data showing many companies spend about 70% of their IT budget on simply maintaining the systems currently in place. Chief technology officer at Redcentric Simon Michie said the industry is reaching a point where change is critical.
Technology liability product introduced
Markel has unveiled a new liability product for technology and communication sectors in the UK, combining public, product and professional liability cover. Markel stated the product is specifically designed for organisations that face rapid growth and constantly changing risks, common in the sector. Buyers are also given access to a debt recovery helpline provided by solicitors Triton Global, offering free litigation advice. Liam Greene, technical line manager, professional and management risks at Markel said the product was created after feedback from brokers who saw a need for a simple solution for time-pressed businesses.
Start-up Digital Fineprint partners with Allianz
Fintech start-up Digital Fineprint has joined the Allianz in-house accelerator program to kick-start its entry into the insurance
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business. The business, which emerged from Oxford University’s Saïd Business School and previously won best general start-up in the UK at The Grad Factor awards, fills out insurance application forms by looking at social media accounts. While it initially began by looking at selling life insurance, the partnership could allow it to branch into car and home income products. Erik Abrahamsson, co-founder of Digital Fineprint, said he is excited at the opportunity.
Ageas launches Back Me Up app
Ageas has launched a new insurance app targeted at the five million 18-34 year olds who do not currently have home contents cover. Called Back Me Up, the app is the first offering from Ageas’ innovation fund. It will cover both possession and travel expenses for a £15 monthly subscription with no annual contract. People can take photos and manage cover for three possessions against accidental and malicious damage, loss and theft. Users can add options from £3 per month for more cover, and change policies on the fly.
Zurich partners with Cocoon for smart security
Zurich Insurance has partnered with Cocoon on the launch of its all-in-one home security system. Cocoon’s security system listens to the noises in a house or flat and develops a profile of what a house’s usual sounds are. The device can then detect unusual sounds, for example a break-in, alert the owner and activate security cameras. Four million UK households now have some form of smart-home system, according to Zurich, suggesting that smart-home technology is only going to grow. Zurich said this is part of its wider innovation push.
The broker and the blockchain The technology behind bitcoin, blockchain, has the potential to change the way insurers and brokers do business A recent PwC survey has found an appetite for blockchain technology among wholesale insurers, creating potential future opportunities for brokers. Blockchain, mostly known as the technology powering bitcoin, at its most basic level is a mutual distributed ledger; effectively a list of information, transactions in the case of bitcoin, shared between parties. Everyone using the blockchain has their own copy of this ledger, making information impossible to forge and not monopolised by a single organisation. At its earliest stage, blockchain’s immediate benefit to the insurance industry is increased efficiency. It could speed up the placement process by allowing brokers, underwriters, the insured and reinsurers to store and share policy documents, increasing accuracy by removing the need to duplicate data. It could also speed up claims management, allowing everyone involved access to policy information. While greater efficiencies are driving the first wave of interest in blockchain, the technology has the potential for far more interesting applications in the future. Steve Webb, financial services blockchain leader at PwC, said the real interest from insurers comes from how they might use blockchain to develop more dynamic products. “You could potentially link something like blockchain, which gives you a digital record of a policy, with something like internet of things and geolocation,” he said. An example he gave was in freight
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insurance. If a shipping company tracked the precise location of its containers using geolocation, and this information was fed into the blockchain, an insurer could activate a policy the moment it is needed. “Could you do that almost responsive pay-for-use or pay-by-use type of insurance, which people have talked about and found too difficult to get their heads around in the past?” Webb asked, echoing the question insurers have been asking. Brokers would naturally
“Could you do that almost responsive payfor-use or pay-by-use type of insurance?” play an important role in this chain and benefit from more dynamic products. While the interest among insurers is there, the challenge is now getting brokers, insurers and other parties on the same page when it comes to standards. While the technology behind blockchain is well developed, Webb said agreeing on implementation is the next step. “That’s what the study was intended to do, to drive out that there are a large number of players that are all feeling the same pain. They can all see the same issue; they can all see the same benefits, and that starts to give you some things to focus around.”
Q&A
John Warburton
Helping not hindering brokers
Co-founder Konsileo
Fast fact This is not his first entrepreneurial venture. He founded a travel insurance start-up in 1999.
Konsileo is described as an insurtech start-up with the realisation that broking needs to be rebuilt from the bottom up. What are the issues you’re hoping to change? The issues we are really focused on solving centre around supporting the individual and their client relationships. The systems that currently exist within the majority of broking firms suffer greatly from legacy issues, which can stifle innovation and collaboration and prevent a high level of efficiency. By building a platform from the bottom up, we can create a flexible environment for both brokers and customers that truly serves their needs.
You’ve stated that technology has hindered, rather than helped, insurance brokers. What did you mean by that? Broker systems were initially put in place to support the backend administration of insurance broking. While these likely had a positive impact 20-plus years ago, the way these tech systems have been built makes adapting to the changing needs of the users and customers a real challenge. We have now got to a point where they have been built to do a job, but not necessarily the right one. Many of these existing systems focus on the interaction between insurers and brokers, but not on what individual brokers actually do, leading to unnecessary rekeying and add-on systems where integration is complex, along with compliance and auditing issues. We want to make the individual’s life easier as that’s where we see the real value in the broking ecosystem.
What is your message to brokers who see technology as a threat to their business? There is a huge debate in the industry about the future of broking and whether robo-advisors will take over the world. While there is a proportion of the market where total automation makes sense, there is still a very real need for the face-to-face relationships that exist. Brokers should see technology as a massive opportunity, especially given the amount of time that is wasted on inefficient administration. A streamlined process built with the user in mind will actually give brokers more time to spend doing what they do best: helping clients.
What are the first steps brokers should take to become more tech-savvy? It’s not about being more tech-savvy; it’s about embracing the available opportunities. Technology is capable of improving most phases in the broking process in a way that is user-friendly. The tech we are building is there to work for them not the other way around. Brokers should expect more from their systems and push for better solutions for their clients. Beyond the tech, taking advantage of digital channels is key to succeeding in the future. Huge opportunity exists via social channels when prospecting for business.
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PEOPLE
INDUSTRY ICON
LOCKTON’S CYBER GURU Lockton Companies’ Ben Beeson discusses the challenges facing the industry today in its efforts to deal with the most talked-about emerging threat
IN 2013, Ben Beeson was relaxing on holiday in France when he received a phone call from Lockton Companies’ head office in Kansas City. “They wanted me to go to Washington DC for a meeting at the White House within two days,” Beeson recalls. “And I thought, ‘This doesn’t sound right. It must be a joke!’ “Within 48 hours, I was sitting with other industry leaders in front of one of the president’s lead advisers on cyber security and a number of lead agencies, representing the insurance industry. The federal government had basically wanted to engage us in helping to roll out the NIST [National Institute of Standards and Technology] Cyber Security Framework, which they had devised to help US businesses understand the risk and how to deal with it.” Beeson is Lockton’s US cyber risk practice leader, a role he took on in January. But his involvement in the cyber risk space dates right back to 1999, before which time he was following a career in London’s reinsurance market. Joining Lockton in 2007, just after the company had made a decision to become a global broker, Beeson and his colleague, Emily Freeman, founded Lockton’s cyber risk practice in London. Working with leading underwriters in Lloyd’s we built a platform that provided both client advisory and placement services to our global clients and became the leading
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team in the London market. Beeson’s extensive experience in cyber has even encompassed him having had the opportunity to testify before the US Congress, in March 2015, about the evolution of the cyber insurance market. He says that chance represents one of his proudest achievements in the cyber space to date. “That was a great moment, having made the decision to relocate to our Washington, DC office in 2014 and only been in the US a
“The good news is [that] the awareness is much better than it was, say, two years ago, particularly at the board and executive level,” Beeson says. “I think that, generally speaking, businesses understand there is a risk.” However, he says there remains a lack of understanding as to how to deal with the threat. “That is because the issue has traditionally been owned by the IT department, the technical people who are invested in the box
“The good news is [that] the awareness is much better than it was, say, two years ago, particularly at the board and executive level. I think that, generally speaking, businesses understand there is a risk” year, to be asked to do that,” he says. “And what resonated with me at that point was what a great opportunity we have, as an industry, on this risk issue. We mustn’t lose that and have to capitalise on that if lawmakers are giving us that type of attention.” So, how well does the business world appreciate the cyber threat in 2016?
of tools – the firewalls [and] the anti-virus software – to keep the problem at bay,” Beeson explains. “That approach no longer works because prevention is very difficult, and so you have to build resilience across the organisation because you should expect you are going to get hit, no matter how much you try to mitigate.”
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PROFILE Name: Ben Beeson Company: Lockton Companies Title: Senior vice president, US cyber risk practice leader Based in: Washington DC Fast fact: Beeson was named Advisen Cyber Risk Champion of the Year 2016, is a member of the Advisory Committee of American University’s new Kogod Cybersecurity Governance Centre, Business Executives for National Security (BENS) and has served as a media commentator on cyber security issues on CNN and Fox News, as well as for The Financial Times, Thomson Reuters and The Huffington Post
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PEOPLE
INDUSTRY ICON
He says building resilience requires ensuring that effort extends right across the organisation. “It includes the people you hire, what access you give them to what information, and how you engage with third-party vendors who deal with your organisation. And that all requires a strategy that comes from the top of the firm, starting in the boardroom.” Beeson says too many companies misunderstand cyber as being only a risk around handling the personal information of individuals. “They view it first and foremost, and
that we’re focused on as a privacy issue.” And how rapidly does Beeson think the cyber threat is growing? “It’s growing as rapidly as technology advances, so very fast,” he says. “The bad guys are still ahead of the good guys. That’s the problem – we’re still playing catch-up with the bad guys, because the economics are much easier for the bad guys than the good guys. The bad guys only have to succeed once, essentially. “We’re continually investing in mitigation, playing catch-up, to keep every attack at bay. The economics dictate it’s much harder to do that.”
“The bad guys are still ahead of the good guys. That’s the problem – we’re still playing catch-up with the bad guys, because the economics are much easier for the bad guys than the good guys” maybe only, as a privacy issue – the liability to the company from handling customer data or employee personal data or their healthcare information,” he says. “Of course, that’s a big risk and that’s certainly where the insurance industry has been focused for the last 15 or 16 years, but it’s way broader than that now, and it’s only just being understood that it’s broader.” Beeson raises the theft of a company’s intellectual property and cyber espionage as key examples of cyber risk unrelated to personal information. “[Cyber] is not a product, it’s a peril, and it’s a peril that can have lots of different types of consequences. We have to start talking much more broadly about cyber risk as a peril that can have different consequences depending on who the buyer is, and change that perception of it only being something
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While the insurance industry offers products that provide breach response services, Beeson says there’s substantial work to be done with respect to the pre-breach side – the time before things go wrong. “Most companies right now are really struggling, for example, to understand how to identify the critical assets they want to protect,” he says. “How do they quantify the risk to those assets? How do they understand what the ROI is on mitigation to those assets, and whether they should or should not buy cyber insurance and how much should they buy? “Those questions, we as an industry right now, are trying to work on and help clients answer, but we haven’t solved that yet, and it’s incumbent upon us to come up with those answers.”
LOCKTON COMPANIES BY THE NUMBERS
1966
The year Lockton Companies was founded
$1.24bn
Total revenue Lockton Companies achieved in 2015
6,000+
The number of associates employed by Lockton Companies
125
The number of countries with clients served by Lockton Companies
68
The number of offices Lockton Companies currently occupies across the globe
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UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? editor@insurancebusiness.co.uk
Standing still is not an option New capital is looking differently at MGAs as nontraditional sources of capital move into the space THERE HAS been much talk about the effects of the Brexit vote and how that will affect the insurance market in the UK going forward. While some of our European colleagues may be spouting doom and gloom, the UK has the professionalism, knowledge, capability and innovation to turn a challenge into an opportunity. Personally, I think EU doom and gloom is a red herring when it comes to the future of overseas insurers in the UK. Few expect the triggering of Article 50 – and the subsequent extended period of exit negotiations – will prompt the exit of many of the companies. After all, the UK is one of the most dynamic and entrepreneurial financial centres in the world and, in my view, remains as the leader in Europe, irrespective of moves by bureaucrats wishing to put Paris or Frankfurt into this position. That said, Brexit does also raise some interesting issues in relation to the use of underwriting capital, especially where MGAs are concerned. In early July, Tom Bolt of Berkshire Hathaway Specialty chaired a panel debate at the MGAA conference on this very subject. The changing shape of capacity provision can be categorised by a shift of those once considered new entrants to the delegated authority space now, in a relative short period, becoming traditional alongside the longstanding established providers. But there are even newer kids on the block without some of the historic baggage that comes with old established businesses. This new underwriting capital is coming from a plethora of directions into the MGA space. This could be as a result of the sustained
growth within the MGA and delegated authority sector or an appetite for alternative and more cost-effective routes to market. If this is the case, then MGAs would have to show a distinct benefit to the capacity provider, for example, in relation to the distribution mechanism. But there are also cost benefits of using the MGA model, including lower operating costs than those of the capacity provider. However, what the emergence of the new
But why the focus on MGAs? One factor could be the direct access and effective structure a delegated authority can bring helping the capacity provider to write the smaller risks. This would leave the traditional insurer to concentrate on writing the larger risks for which they have a huge degree of expertise, and can make a healthy return. For the broker setting up an MGA, it can separate and segregate its placing and delegated authority activities managing conflicts and clarifying their fiduciary duty. In any event, new capital is looking differently at MGAs. Not only relying upon them for access to market but also to source untapped insurance buyers. These new kids on the block will be looking for experience and professionalism in relation to underwriting and, where appropriate, claims handling via the delegated authority mechanism. The move by different and non-traditional
“The emergence of new forms of capacity highlights why all insurers should be reviewing their own cost ratios and expenses” forms of capacity does highlight is why all insurers should be reviewing their own cost ratios and expenses and how using the MGA distribution chain could have an overall effect on the unit price of the insurance product, which is a positive outcome for personal and corporate buyers. Moreover, we are seeing some capital flowing into the UK delegated authority arena from the reinsurance market. The challenging environment for reinsurers may be fuelling this move to the delegated authority market as a way of utilising capital and capacity to generate a return greater than currently being provided by their existing reinsurance portfolios. Other financial providers are also looking at the MGA space. Institutions such as pension providers, hedge funds and private equity are all looking at ways of a sensible return on underutilised or low-performing capital.
sources of capital into the MGA sector will continue to invigorate this space. The change in structure, appetite and approach that this brings to underwriting will help to develop product distribution. MGAs will also be at the forefront of this evolution, not only enhancing the established distribution chain with increased access to markets, but also challenging it to develop and respond to the needs of buyers. So while there may be some uncertainty about a post-Brexit UK, the MGA sector will not see standing still as an option and will embrace every opportunity that change brings. Peter Staddon is the managing director of the Managing General Agents’ Association. He is an experienced insurance industry practitioner with more than 40 years in broking and delegated authority markets.
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SPECIAL PROMOTIONAL FEATURE
TRAVEL INSURANCE
The world is getting smaller
Holidays are more popular than ever before, but insurance is still an afterthought, explains Paul Martin of Ageas IT’S ASTONISHING to think that, during 2015, UK residents made 65.7 million visits abroad. According to the Office for National Statistics, Brits made 9.4% more visits abroad and spent £3.5bn (9.8%) more during these trips in 2015 than in 2014. Furthermore, the length of time they spent abroad on each trip also increased by 10.7% to 682 million nights, up from 617 million nights in 2014. The stats are helpful in demonstrating that holidays are more popular than ever before as the number of trips taken for holidays grew by nearly 10%. Spending on holidays, visits to friends and business travel increased by 7.6%, 2.9% and 30.2%, respectively.
And when it comes to the destination of choice, Spain continued to be the leading location for the British, accounting for 13 million visits – a 6.1% increase from the previous year, and responsible for nearly a fifth of the total number of visits abroad. While Spain is ever popular, visits to North America, Europe and other countries grew in 2015, up 6.4%, 10% and 7.3%, respectively. We are not shy of putting our hands in our pockets when it comes to choosing our holidays, with spending in each of those regions increasing by 14.9%, 12.4% and 1.9%, respectively. That is a phenomenal amount of trips that the British population takes and this
BOOMING HOLIDAY SECTOR
Travel abroad up 9% during 2015
Average medical insurance claim costs £1,022
£3.5bn more spent on overseas travel
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information shows the immense appetite people have for travelling abroad to relax, take in the culture of other countries and spend time with their friends and families. It is no surprise then – with foreign travel becoming so popular – that the need for travel insurance is essential to provide reassurance that, while abroad, holidaymakers are covered for a variety of possible eventualities. Travel is a risky business. Medical claims have the potential to run into thousands of pounds, especially if someone needs to be medically repatriated by air ambulance.
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“Medical claims have the potential to run into thousands of pounds, especially if someone needs to be medically repatriated by air ambulance” Paul Martin, head of travel and special risks underwriting, Ageas According to the ABI, in July 2015 the average cost for a medical claim had reached £1,022. It’s also no surprise that nearly a fifth of all claims are made by some of the
13 million people who travel to, or who are on holiday in Spain. Travel insurance may be the last thing people think of when they book their annual
holiday, but it can give holidaymakers the peace of mind that they’re covered against the potentially high costs of medical treatment, and protection against lost or stolen possessions or the cancellation of the trip. Making sure that the insurance needs of these travellers are covered is more important now than ever before, and we recognise the excellent work our broker partners go to when arranging travel insurance for customers. However, we are also aware of the need to offer policies that suitably cover the eventualities people are most concerned with when they go on holiday. That’s why we have taken the time to review how we underwrite policies to offer better levels of cover. There’s much we can do as an industry to help people ensure they are adequately covered for their holiday and so, from 1 September 2016, our new travel insurance policies began to offer even better value for money. Through our online quote-and-buy portal, discounts for couples and families are now available, and children can go free (a child is defined as someone under 18 or under 21 if in full-time education). Our new optional travel disruption cover is there for travellers whose travel plans are disrupted by specified unexpected events, and who do not benefit from the protection offered when booking a package holiday. Additionally, we now have wider acceptance for cover in respect of pre-existing medical conditions. The world is certainly more accessible and enticing, but travel also carries an element of risk. Ensuring we can provide our broking partners with a beneficial policy that represents excellent value for money is a key step to encouraging travellers to purchase travel insurance when they go on holiday. And, of course, we’re here to support the broking community in making travel insurance easy to understand.
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SPECIAL PROMOTIONAL FEATURE
LEVELS OF COVER
Underinsured, overexposed Brokers understand the risks of underinsurance – but how do you get that message across to your customers?
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PERHAPS THE most clichéd phrase aimed at knocking the value of insurance is: “It’s not worth the paper it’s written on.” Unfortunately, for some SMEs that find themselves underinsured that statement may have just a little too much truth to it. However, the customer’s role in setting the sum insured is critical, and unfortunately there are few shortcuts. Brokers and insurers can and do provide valuable help, guidance, advice and support to customers on the basis of cover and how to arrive at appropriate values, and where necessary put customers in touch with experts, but ultimately the level of cover is decided by the customer. What’s important is making them aware of the consequences of underinsurance. According to an Aviva SME Pulse Survey in 2015, one in five SMEs were not confident that they had the right insurance cover – a move that can prove massively costly. Indeed, from a sample of clients where underinsurance was identified, Aviva’s survey team found 177 cases where customers had been underinsured, on average by £486,000. “There are many reasons for underinsurance and it can happen to any size business or indeed individual,” says Nick Smith, senior manager of product strategy at Aviva. “Underinsurance is often associated with having insufficient sums insured or limits, but for some customers it might simply be that they have not purchased the insurance cover in the first place. “Underinsurance can arise as a result of a lack of understanding or experience – for example, not realising buildings should be insured on the cost to rebuild them, not on the market value. Or another example would be not keeping up with the replacement costs or changes in business or personal circumstance since the policy was taken out,
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or it can be a more complex issue across different areas of the business operations.”
The realities of underinsurance There are many significant examples of underinsurance across a variety of businesses. In one example a hairdresser who was carrying more stock than they had told their insurer about suffered a theft of more than £1,900 worth of stock. The claim was covered but the owner was ultimately underinsured by £900. Of course, the consequences can be much more devastating than simply being left out of pocket – as an unfortunate case involving a manufacturer proves. It had taken out business interruption insurance for a 12-month period believing it could quickly recover from any major event. However, when a fire struck, the extent of the damage and the specialist nature of the business meant that planning permission, repairs and build time would take three to four years. Ultimately, it was underinsured by £7m-£10m and the business had to quickly close, leading to a number of job losses.
Getting the message across Despite a litany of examples of underinsurance, getting the message across to customers who are fixated on the price of their policies can be difficult. “It’s important that businesses appreciate focusing on price first or price alone is a mistake,” says Smith. “Our advice would be that it’s a false economy to buy anything less than simple, quality cover that will deliver when it is needed. “Brokers can also help explain that there are other ways to positively influence a business’ premium – for example, helping the business to manage its risks to bring down claims costs and therefore premiums.”
“Engagement is really important – insurers and brokers need to engage with their customers to make sure they share expert advice,” he adds. “Insurance is about risk transfer, where getting the basis of the cover correct means that when the unexpected happens the customer’s policy will perform as they need and expect. Focus first on structuring the right cover, then look at how you secure that cover at a competitive rate that offers value for money.”
HOW BIG IS THE PROBLEM?
177
Cases of underinsurance identified by Aviva from a sample of just 383 clients
Raising the issue There are some key moments when raising the issue of underinsurance becomes particularly prevalent. For example, insureds should be encouraged to have their property professionally valued for insurance purposes at least every three years; while altering or extending a property also becomes a key point to assess a level of cover. In fact, whenever there are changes or as their business grows or develops, insureds should speak to their insurer or broker so that they can be sure their insurance cover keeps pace. According to Smith, brokers don’t need to go into those conversations alone – with insurers willing to arm them with the tools necessary to make their voices heard. “We’ve done a lot of work over the past few years to encourage customers to think about their insurance needs and explain to them what being underinsured would actually mean, because finding out there is insufficient cover at the point of a claim just isn’t helpful for anyone,” he says. “We’ve created a guide to explain what underinsurance is and what it looks like; we have included examples that list some of the triggers in the lifecycle of a business where underinsurance can occur. We can also provide access to valuation services for our customers.
£486,000
The average amount by which those businesses were underinsured
77%
Properties underinsured according to Barrett Corp Harrington “In addition, we are continuing our programme of simplifying our policy wording and have recently begun making changes to our e-traded policies to provide an extra layer of protection. This includes combining the sums insured, removing the rule of average and increasing business interruption, public and product liability covers. “Ultimately, we believe it is really important to work with our brokers to make it easy for customers to understand the level of cover they need and buy a policy that is easy to understand and has the flexibility to automatically grow with the customer.”
www.insurancebusiness.co.uk
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FEATURES
COVER STORY: YOUNG GUNS
YOUNG GUNS 2016 26
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These 30 young professionals are energising and revitalising the entire UK insurance industry IT IS no secret that the insurance industry is ageing. According to a 2015 report from the Chartered Institute of Personnel and Development, 22.6% of the financial and insurance industry workforce are aged 50 and over, and more than a quarter of those are over 60. More than ever before, the insurance industry is focused on recruiting fresh talent. While that task can seem insurmountable at times, this year’s crop of Young Guns proves it’s anything but. To compile our inaugural Young Guns report, we asked you, our readers, for your nominations and also reached out to the top UK insurance companies and brokerages to uncover the following selection of 30 impressive young men and women
COMPANY
Allianz Insurance Plc ANV ANV Aon Aon Risk Solutions Aon UK Limited Arthur J. Gallagher Atrium Risk Management Services AXA Insurance AXA Insurance BC Underwriting BMS Group CLS Risk Solutions Commercial Insurance Services Ltd. Elliott Westland Insurance Brokers Ltd.
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who have already had a significant impact in just their first few years in the industry. Despite being 35 and younger, these individuals are emerging leaders in their companies and are rising quickly into influential roles. Applying their diverse backgrounds to the needs of the insurance market, the 2016 Young Guns have the world at their feet as they attain new heights in and out of the office. Whether they’re brokers, underwriters or company leaders, their contributions and efforts are inspiring peers and mentors alike – and paving the way for a bright future for the next generation of insurance professionals.
NAME
COMPANY
32 32 37 28 32 29 29 34 33 28 36 31 36
Ogden, Stephanie James, Andy Hilton, Tom Hammond, Jack Mura, Veronica France-Hayhurst, Serena Dennis, Florence Jelley, Gareth Smith, Andrea Santer, Emily Stripp, Tom Le Flufy, Ed Patey-Ford, Harvey
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Cooper, Adam
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Elliott, Lucy
Griffiths & Armour Hiscox Hiscox Liberty Specialty Markets Markel International Markel International Marsh Mason Owen Financial Services Modus Underwriting One Call Insurance Ltd Prospect Insurance Brokers Protectivity Insurance / SportsCover Direct RSA Group RSA Group Talbot Jones Risk Solutions Ltd
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NAME
29 36 36 33 35 34 28 34 30 30 37
Hopwood, Thomas Holberry, Adam Pike, Tabitha Dexter, Elizabeth Upton, Thomas Desai, Bhavik Hickinbottom, Jake Gosney, Samuel Zimbiti, Kundai Rose, Oliver Gadbury, James
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Brownsell, Andrew
30 32 35
Smith, Hannah Kate Knight, Tori Talbot-Jones, Richard
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FEATURES
COVER STORY: YOUNG GUNS
JAKE HICKINBOTTOM Broker
Advice
MARSH Age: 28
Founder of the Next Generation Insurance Network (NGIN), Jake Hickinbottom has accomplished a great deal since joining the industry five years ago. Currently at Marsh, Hickinbottom works on the firm’s specie team, focusing on cash-intransit, securities, investor protection and cryptocurrency lines of business. Hickinbottom personally developed a new line of business, cryptocurrency cold storage insurance by working closely with Lloyd’s of London, Lloyd’s underwriters
EMILY SANTER Head of executive office & corporate development AXA UK & IRELAND Age: 27
For Emily Santer, getting to work for a major insurer was an opportunity to learn, develop and grow, while “being able to deliver peace of mind to customers when they most need it.” Just two years after joining AXA in 2010, Santer was asked to join CEO Amanda Blanc’s office as executive assistant and was recently
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and Marsh’s legal team. Hickinbottom established new wording for the product and has travelled internationally to integrate himself into the cryptocurrency ecosystem. Aimed at empowering young professionals, Hickinbottom formed NGIN in 2012 and serves as the organisation’s executive chairman. Focused on bringing together young insurance professionals and helping new entrants into the market, NGIN currently has over 1,500 members, recently launched a mentor scheme, and works with key sponsors to help improve its offerings to members.
“A lot of individuals enter the industry and immediately notice how much could be done to improve the way in which we work. But after a while they stop challenging the status quo and start adapting to the mould. I would say don’t stop trying to make a difference as the industry will need to change and you could be at the forefront of it.” promoted to her current role where she is responsible for managing the CEO’s executive office, which includes contributing to major projects, the strategic planning process, and implementation of operating plans. Her most recent accomplishment is being the youngest candidate in the company’s Emerging Future Leaders talent programme in the last five years. Apart from performing her regular duties, Santer also contributes to the company’s CSR: “Every year, I cajole AXA’s executive team into doing a challenging event to raise money for our nominated charity, Alzheimer’s Research UK. Last year, it was the three peaks, and we raised £37k; this year, it is walking the Jurassic Coast in Dorset.”
JACK HAMMOND Broker AON Age: 25
It’s the people-oriented nature of insurance that drew Jack Hammond into the industry, giving him the prospect of a varied working life. He started out at Aon as a graduate trainee, and is now a fully fledged broker for financial institutions in northern and western Europe, specialising in crime, professional indemnity, D&O and cyber insurance. Early this year, he was on secondment in the Netherlands, and added new business from establishing links with the local Aon office and clients. An active member of the Next Generation Insurance Network, Hammond is specifically involved with its mentoring scheme, and is also part of the Insurance Institute of London’s Young Members’ Committee. Hammond emphasises the need for young professionals to keep networking and exploring to understand the industry better: “Go out and meet as many people as possible. Having a decent network behind you will be very useful in the future. I would also suggest asking to be put on lots of different projects within your firm and department … it will give you an insight to opportunities, which you can then develop and innovate.”
www.insurancebusiness.co.uk
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SERENA FRANCEHAYHURST Associate director AON UK Age: 29
Relationships and reputation – the two Rs that were crucial for Serena France-Hayhurst when establishing her career in insurance. Entering the industry through Aon’s graduate scheme, France-Hayhurst worked with teams for global professions, fine art, specie and financial institutions,
FLORENCE DENNIS Financial lines account manager ARTHUR J GALLAGHER Age: 21
Once people discover what she does for a living, many respond by commenting that an insurance brokering career must be boring – but not for Florence Dennis. “I spend ages explaining how interesting insurance brokering actually is, and how each day is different and why I love the job,” she says. “There are so many different routes to take and places to progress to. Every day is different, which keeps me interested and wanting to learn more.” Currently with Arthur J Gallagher’s SME financial lines team, Dennis will soon be moving to the firm’s mid-corporate general insurance team to train in different areas, as part of her on-going development and commitment to the industry. To award her commitment to excellent service, AJG awarded Dennis with its DARE (Delivering All-round Excellence) award. She presently serves as the BIBA East Midlands young broker ambassador and recently made it through to BIBA’s Young Broker Finalist Day for the association’s Young Broker award 2016.
THOMAS HOPWOOD Broker GRIFFITHS & ARMOUR Age: 30
while working in various roles, from client servicing to broking and claims. Presently, as associate director and line manager, France-Hayhurst arranges and advises on insurance programmes for commercial and financial institutions in Europe, the Middle East and Africa, with limits ranging from £3.8m to £191m. She also leads a feedback project group that works to address the concerns of network colleagues. Outside the company, France-Hayhurst is a member of the CII’s New Generation Programme broking group.
From an early age, Thomas Hopwood was acquainted with insurance, as it was often a topic of dinner table discussion at home. Today he finds that the industry has a nobler purpose than most people realise. “Our industry provides the security and basis on which economies are able to innovate, create and develop, and [it] does not receive the credit that it deserves,” he says. Specialising in professional indemnity insurance for the construction sector, Hopwood advises SMEs on contractual and risk management, and multinational consultants on professional risks in the UK and abroad. He takes pride in his team having successfully renewed all of the company’s largest clients, resulting in turnovers of between £1m and £535m. Hopwood serves as treasurer for the Insurance Institute of Liverpool, helping arrange CPD and career advice events, and was runner-up for the institute’s Insurance Young Achiever of the Year award in 2013. He also serves as vice chairman for the Association for Consultancy and Engineering Progress Network (North West). Hopwood stays active by playing various sports and participating in triathlons, as well as achieving his lifelong dream of running the London Marathon in 2013.
www.insurancebusiness.co.uk
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FEATURES
COVER STORY: YOUNG GUNS
OLIVER ROSE Company director ONE CALL INSURANCE SERVICES Age: 30
So far, 2016 has been a stellar year for Oliver Rose. In addition to being named an IBUK Young Gun, Rose received BIBA’s Young Broker of the Year award in July. He currently oversees a distribution channel at One Call Insurance Services tasked with reaching over £150m GWP across four core lines of business, a target that his team is set to surpass. Last year under Rose’s guidance, One Call attained £121m GWP, a 53% increase from 2012, when he took over as company director. In his 13 years with One Call, he has spearheaded several company initiatives, including launching the One Call Live Drive Brand, specialising in telematics insurance, and launching three delegated authority schemes.
Advice “I would advise anyone working in our industry to commit to a role they have a passion for and not be sidetracked by quick wins offered by moving firms. I have found the long-term goals offered through loyalty far outweigh those of short-term gains.”
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HANNAH KATE SMITH Executive assistant to managing director RSA GROUP Age: 27
Hannah Kate Smith had many reasons why she decided to join the insurance industry: “I joined RSA on their global graduate scheme and there were loads of positives: the opportunity to work in a fast-paced business environment; the variation of roles available; the chance to travel and work internationally; the opportunities to progress; the energy of the people and the culture of the business. Above all, as insurers, our main aim is to help and support our customers – and
KUNDAI ZIMBITI Head of pricing and analytics MODUS UNDERWRITING Age: 28
Working closely with Modus Underwriting’s product development and underwriting teams, Kundai Zimbiti works to build and maintain pricing models to assist in the optimisation of results and the delivering of key business objectives. With over six years of personal and commercial insurance experience, mainly within the pricing and reserving departments, Zimbiti has made an impact
helping people is something that has always resonated with me. I’ve been in the industry for five years and I’ve no intention of leaving.” Recently promoted to her current role, Smith manages key business activities on behalf of the managing director to ensure the smooth running of RSA’s £2.3bn commercial lines operation, spanning the UK, Western Europe and Dubai. Prior to her position today, Smith led a team of account managers in RSA’s intermediated business and is a mentor to a number of people across RSA and the industry. Smith was involved in the set-up of a market-wide mentoring scheme for ACII candidates, which aims to progress mentees through their exams in order to complete the qualification within a three-year period. In addition to being an IBUK Young Gun 2016, Smith serves as the current chair of the Young Members’ Committee at the Insurance Institute of London and was elected vice president at IIL this year.
Fun fact Smith is a trained dancer who regularly performs with a Londonbased stage musical society, Geoids, while also serving on the society’s committee.
at the almost two-year-old independently owned MGA as the firm’s head of analytics. “Kundai is blazing an entrepreneurial trail at Modus. Although he is new to our organisation, he is fast becoming a critical member of the management team, spearheading our actuarial and pricing function, building the infrastructure in a brand-new business that is far ahead of our peers and providing a real competitive edge to our business,” says Natasha Pettet, director at Modus. “He has a great reputation with insurers, building confidence and respect as a result of his ideas and understanding.”
www.insurancebusiness.co.uk
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ED LE FLUFY Specialty reinsurance broker BMS GROUP Age: 29
Like most people in the industry, Ed Le Flufy entered on happenstance, but his love for the industry grew, not only because of its “interesting and extremely diverse” nature, but also because he is constantly motivated by the value his role brings. “I am motivated by my understanding of the industry’s perhaps underappreciated role in the world’s economy, providing real value to businesses, helping them to manage, mitigate and ultimately transfer risk and protecting them when
GROUNDWORKERS insurance-business-ad.pdf
CIVIL ENGINEERS 1
11/08/2016
HIGH RISK
things inevitably go wrong,” he says. At BMS Group, Le Flufy has contributed to the company’s expansion into US crop index-linked products, which has resulted in over £3.8m of new premium in the market from 2013-2016. A recent recipient of his ACII designation, Le Flufy has been chosen to take part in CII’s New Generation programme 2016 and is also a member of the Insurance Institute of London’s Young Members’ Committee. Outside of work, Le Flufy is a wine enthusiast and holds a Wine & Spirit Education Trust level-two award in wine qualification expertise, and is a fan of skiing, tennis, sailing and cruising the roads in his 1976 Triumph Spitfire.
GENERAL CONTRACTORS
17:14
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the personal professional touch. We schemes and affinity groups and wil take time to work with you to large books of business. provide the best product and price for your customer by using our experience So, if you have any construction Business Development Manager to be as innovative and as flexible as needs from Ground Up to Demolition GROUNDWORKERS CIVIL ENGINEERS HIGH RISK GENERAL CONTRACTORS we can. we wil be pleased to help you. michael@thamesunderwriting.com Tel: 01702 713636MUSCAT MICHAEL
MICHAEL MUSCAT
At Thames, we like to feel we provide the personal professional touch. We will take time to work with you to provide the best product and price for your customer by using our experience to be as innovative and as flexible as we can.
Special terms can be arranged for schemes and affinity groups and large books of business.
So, if you have any construction needs from Ground Up to Demolition we will be pleased to help you.
Send any submissions or enquiries to:
Business Development Manager
michael@thamesunderwriting.com Tel: 01702 713636
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FEATURES
COVER STORY: YOUNG GUNS STEPHANIE OGDEN Branch manager, Glasgow ALLIANZ INSURANCE Age: 29
You can say that Stephanie Ogden has her best friend to thank for her career today: “It was actually my best friend who was looking at graduate schemes for me, as she didn’t trust that I would apply for any. She wrote and sent my application to Allianz, as she thought it would be a good scheme … how right she was! I received offers from a couple of graduate schemes before deciding that Allianz was the best scheme.” That decision paid off – last October, Ogden became the youngest branch manager at Allianz, when she
TORI KNIGHT Senior Trading Underwriter RSA GROUP Age: 23
“I think as a young female in particular, it is a great time to have joined the industry and I am excited to see how the sector modernises and develops over the course of my career, and I am certainly keen to get involved and help shape this wherever I can,” says Tori Knight. Attracted to the industry’s dynamic nature, as well as it being “intrinsically
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was appointed to the position at the company’s Glasgow branch, overseeing the Scottish region. This was following her contribution to the business as a specialty lines underwriting account manager, where under her leadership, the specialty lines division grew by over 60%, including an additional £4.5m in GWP. Furthermore, Ogden is one of only two commercial representatives on the Allianz Diversity Steering Committee, chaired by CEO Jon Dye. In that role, Ogden works with Allianz’s management board to ensure the firm’s continued commitment to developing as a diverse business. Outside of insurance, Ogden does what many animal-lovers would dream of – boarding young puppies while they are in guide-dog training school.
linked to real-life factors, from global politics to climate change,” Knight was first exposed to insurance as a summer intern while studying physical geography at university. Starting her career in 2014 with RSA’s Underwriting Graduate scheme, Knight has now landed a permanent role as senior trading underwriter, while working to be ACII qualified by October. So far, she has delivered an underwriting strategy for a product of the energy team, designed a personalised Broker Mapping Tool for cost efficiency, and executed an in-depth UW license review with recommendations to senior management. Outside the company, Knight serves as head of events for the Next Generation Insurance Network where her work involves organising monthly formal events for the under-35 community in conjunction with major research firms. Her passion is for the industry to pursue market modernisation and use of new technologies, as well as attract more women and young talent. In a nod to her last name, has been a keen horse rider since a young age and also keeps fit by running and doing yoga.
ANDY JAMES Underwriter, professional indemnity ANV SYNDICATES Age: 28
While choosing between various financial and management-related fields, Andy James found that insurance underwriting offered a good balance of being technically challenging and socially relevant. “Assessing risk is something interesting and mentally challenging … the relationship-focused nature of insurance made underwriting more multifaceted than the other professions I applied for,” he says. Since joining ANV, he has been promoted twice in less than two years as he continues to contribute to ANV’s new open market business and growing PI book. He is part of the Insurance Institute of London’s Young Members’ Committee, and contributes to the association’s publication. He received prizes from the IIL and the Chartered Insurance Institute for attaining the highest score in the advanced insurance broking exam in 2013. James reminds young professionals entering the industry of how broad and diverse it is and to plan and think ahead. “Seriously think about your strengths and what interests you most before choosing whether you want to be a broker, underwriter, claims adjuster, etc, and choosing which line of business you want to work in. It’s a long career ahead of you.”
www.insurancebusiness.co.uk
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ANDREA SMITH Business finance manager ABI, commercial lines AXA INSURANCE Age: 30
First exposed to the industry while working at Barclays Partner Finance, Andrea Smith was keen to learn more about insurance and eventually entered the industry when she joined Tesco Bank. Looking for a new challenge, Smith joined AXA where her current role allows her to support the business through financial negotiations when securing deals with E-partners and corporate partnerships. Heavily involved in the project to set the 2020 strategic plan for AXA Business Insurance, Smith is also involved in innovative initiatives such as providing financial insight for AXA’s app development. As a result of her efforts, Smith was nominated for AXA’s Finance and Risk Awards Rising Star recognition and was a finalist, along with her team, for the Finance Team of the Year award. Utilising her strong leadership skills and passion for developing individuals, Smith is involved with various charity events from AXA’s Glasgow branch office.
ELIZABETH DEXTER Senior underwriter LIBERTY SPECIALTY MARKETS Age: 30
Over the past four years, Elizabeth Dexter’s efforts have been imperative in helping her team grow premium income by 75% at Liberty Specialty Markets. Promoted to senior underwriter a year ago, Dexter first joined Liberty in 2008, where she started in property before moving to the global financial risk and contingency team. “I was always interested in the competitive and social environment of the city and after spending a couple of summers in insurance, I realised that this was the career I wanted to pursue,” she says. In addition to her role at Liberty, Dexter is currently serving as chairman of Lloyd’s Non-Marine Under 30s, an open society in the non-marine market that brings together young brokers and underwriters through networking, social, educational and charitable events.
ANDY BROWNSELL Commercial director PROTECTIVITY INSURANCE/SPORTSCOVER DIRECT Age: 34
For Andy Brownsell, insurance was a stopgap-turned-permanent career. While working as a fitness instructor and personal trainer, he joined SportsCover Direct and worked his way through sales, marketing and business development before he was appointed to commercial director in 2014. He has led the business to exceed 20% growth in GWP year-over-year
for the past four years, and recently formed an in-house marketing team to keep track of and boost customer experience. A 12-year veteran in the industry, Brownsell is “still as passionate about developing the business and learning more, as [he] was at the beginning”. He welcomes the growth of e-commerce in the insurance space and the increasing use of technology, while recommending that young professionals keep the personal touch. “Understand the customer, their journey and various touch points and develop an online experience that works,” he says.
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FEATURES
COVER STORY: YOUNG GUNS SAMUEL GOSNEY Regional development executive MASON OWEN FINANCIAL SERVICES Age: 25
VERONICA MURA Senior marine claims advocate AON RISK SOLUTIONS Age: 32
After receiving her law degree, Veronica Mura began her insurance career in Italy before moving to New York to practise marine law. Now working at Aon’s Global Broking Centre in London, Mura serves as the practice leader for marine cargo claims, and sits on the company’s Claims Leadership Committee. She has led the claims team’s network project for strengthening the links between the London insurance market and Aon’s international network, and continues to serve as the point person for various Aon network offices. A member of the Lloyd’s Under 30s group, Mura also speaks at various events to promote awareness of the London market and the industry to graduate and post-graduate students.
Advice “Learn as much as you can from people who’ve been around for many years because they have seen it all, and not through a computer screen. Put yourself in the client’s shoes; think and be creative because it’s all about finding the best solutions. There is no univocal answer.”
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From dealing art in London to brokering in Liverpool, Samuel Gosney has accomplished a lot in the few years since he graduated from university. After receiving a BA in fine art at Central Saint Martins and working as an art dealer, Gosney joined the insurance industry in 2014 and quickly adapted to his new field. “After only a few weeks in the industry, I was recognised for my ability to quickly get to grips with the unusual class of business I work in, and was invited to apply for the prestigious Allianz Scholarship Programme. I was accepted and have almost completed my Dip CII after only 24 months in the industry,” he says. Newly promoted to regional development executive, Gosney manages clients and insurers across the south of England. For the past two years, he has sat on his regional BIBA committee and is the regional ambassador for young brokers in the Merseyside, West Cheshire, North Wales and Isle of Man areas.
BHAVIK DESAI Head of professional indemnity MARKEL INTERNATIONAL Age: 31
Appointed to head of Markel’s professional indemnity business this past summer, Bhavik Desai has a decade of insurance experience under his belt after joining the industry due to its “intellectually testing” nature that involved people and relationships. Since joining Markel in 2013, Desai has successfully re-engineered Markel’s IFA book to create a profitable, sustainable portfolio, while leading the development of Markel’s commercial combined general liability policy and broadening the company’s distribution and cover-holder relationships.
GARETH JELLEY Underwriter ATRIUM RISK MANAGEMENT SERVICES Age: 35
After graduating in 2002 with a degree in business studies, Gareth Jelley spent 15 months working and travelling around the world, visiting China, Australia, New Zealand and Southeast Asia before getting into the world of insurance. A few years later, Jelley joined Atrium Underwriters as an underwriting assistant on the North American property and casualty team, where he assisted the underwriters with servicing clients while frequently travelling to the US to help develop Atrium’s online underwriting platform, AUGold. In 2010, he received the opportunity to help set up Atrium Risk Management Services, and he currently manages the marketing, business development and day-to-day operations at the servicing company that is responsible for the marketing, underwriting and servicing of AUGold. Aside from the world of insurance, Jelley keeps active by spending time with his wife and daughter while also participating in numerous sports. A supporter of a multiple sclerosis charity, Jelley recently participated in a 160km bike ride in September.
www.insurancebusiness.co.uk
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ADAM COOPER New business executive COMMERCIAL INSURANCE SERVICES Age: 21
RICHARD TALBOTJONES
Realising his passion at a young age, Adam Cooper knew exactly what career he wanted to pursue. “[What] initially motivated me to enter into insurance at the age of 16 was an interest and passion for risk and how insurance [offered] a safety blanket for clients if the worst was to happen. My passion has grown ever since,” he says. Joining the business at the age of 17 with Commercial Insurance Services’ business administration apprenticeship scheme, Cooper quickly made an impression at the Surrey-based independent insurance broker. After impressing his tutor, Cooper completed
Director TALBOT JONES RISK SOLUTIONS Age: 34
After sustaining an injury while enlisted in the army, Richard Talbot-Jones spent seven years working for various UK brokers before branching out and launching his own brokerage with his wife, in February of 2016, which specialises in charity, professional indemnity and small business insurance. Despite the hectic nature of starting a business, Talbot-Jones remains heavily involved in various trade and community organisations, including serving as vice president and a former president of the Insurance Institute of Newcastle upon Tyne, director at the North East Initiative on Business Ethics and serving as a member of the advisory council at the Institute of Hazard, Risk and Resilience at Durham University. Additionally, he recently completed his CII and was selected by the CII and a non-profit to share his story about his transition from military service to the business world.
THOMAS UPTON Claims manager, energy, cargo and terrorism MARKEL INTERNATIONAL Age: 28
his NVQ in business and administration months ahead of schedule and soon after, at the age of 19, he was appointed as the firm’s new business executive. “This was a big challenge for me, but I found [that] my new role came naturally; building relationships with new and existing clients and learning how to ensure that cover is suitable for their needs, while ensuring that we could offer them competitive quotations,” he says. Intent on building his skills and career further, Cooper entered 2016 with his CERT CII qualification, was a BIBA Young Broker of the Year finalist and regularly engages with as many charity and community events as possible. “All I can think about is growing my knowledge of the industry to help my career and putting myself forward for more industry level qualifications,” he says.
Just as any other new graduate, Tom Upton was looking for a job that related to his degree in marine biology – and he stumbled upon Lloyd’s graduate scheme. Keeping to the marine track during his time within the scheme, Upton eventually found his niche in energy claims. After his stint as claims underwriter for marine and energy at Hiscox, Upton joined Markel as senior claims adjuster, and was recently promoted to claims manager. As he puts it, working on energy, cargo, specie and terrorism “may seem like an eclectic mix of classes [but] there is logic in the madness”. Upton serves as vice chair of Lloyd’s Marine Under 35s insurance group committee, chair of the International Marine Claims Conference Under 35s subcommittee, and fellow of the Chartered Insurance Institute. Even outside insurance, Upton is involved in the marine sector. He has a post-graduate diploma in maritime law, works as a diving instructor and is currently training for his yachtmaster qualification, while spending his free time diving and sailing.
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FEATURES
COVER STORY: YOUNG GUNS ADAM HOLBERRY
Formed just three years ago, BC Underwriting is now responsible for generating more than a third of Bennett Christmas’ GWP, a feat that would not have been attained without Stripp’s leadership. An industry peer comments that Stripp is “passionate about dispelling the image of insurance as being ‘pale, stale, male and boring’ and encourages others to follow in his footsteps. He goes out of his way to foster an environment that’s not just supremely productive – his team of nine grew the business by 51% last year – but also fun.”
Head of alternative distribution HISCOX Age: 31
With a background in international property, Adam Holberry joined Hiscox in 2012 and leveraged his previous experience from Axis Capital and Allied World Assurance Company to help the company grow its international property book. His underwriting experience and entrepreneurial flair influenced Hiscox to pursue underwriting partnerships in classes of business where they did not previously specialise in and as a result, Holberry was promoted to head of alterative distribution in December 2015 to work with brokers and underwriting partners to develop new and additional areas of insurance coverage. His strong leadership has led to alternative distribution being Hiscox’s largest line of business in terms of income.
TABITHA PIKE
TOM STRIPP Managing director BC UNDERWRITING Age: 32
Accepting the first job he did out of college proved to be a great decision for Tom Stripp, as he now leads the team at BC Underwriting, the underwriting division of Bennett Christmas Insurance Brokers, as the firm’s managing director.
Advice “Do not dismiss insurance as a career. At the end of the day, insurance is a part of everyday life; therefore, there is always a need. Career opportunities are endless with hard work, commitment and willingness to learn.”
Senior aviation underwriter HISCOX Age: 28
Switching career paths from law to insurance, Tabitha Pike gained interest in insurance after graduating with a law degree, although her genes may have also influenced her as most of her family worked in the London market. After joining Hiscox in 2011, Pike progressed through the organisation into her role today where she responsible for all areas of the aviation account, including rating, modelling and business planning for various product lines as well as shaping business strategy in periods of uncertain soft market conditions. Involved with various CII and LMA Academy events, Pike was a part of the 2012 winning team of the LMA Syndicate Business Planning programme was selected for this year’s CII New Generation Programme.
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HARVEY PATEYFORD Development underwriter CLS RISK SOLUTIONS Age: 24
Harvey Patey-Ford began his insurance career in 2012 by conducting research into the role of innovations within the insurance industry, focusing on methods to develop an environment that cultivates creativity. As a result of his knowledge and research, Patey-Ford was invited to present his research at the 2015 annual ARTEM Organisational Creativity
International Conference in France. Working predominantly in the real estate insurance market, he has been instrumental in providing insurance solutions for some of London’s iconic developments, as well as recently playing a critical role in securing CLS’s largest piece of business in the company’s history. However, Patey-Ford’s most revolutionary contribution to the insurance industry to date has been combining data analysis with underwriting procedures in order to deliver effective insurance solutions to high-level corporate real-estate transactions. He has a long-term vision to establish a natural synergy between automated data analysis and long-standing underwriting expertise, and his determination, passion and charisma help drive himself and his company forward.
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JAMES GADBURY Broker PROSPECT INSURANCE BROKERS Age: 27
Since joining Prospect Insurance Brokers in 2011, James Gadbury has made a tremendous impact at the London-based broker. In 2015, he set up UAV Protect, a new trading name for Prospect, which provides tailored aviation insurance to unmanned aerial vehicle (UAV) operators and manufacturers worldwide. Gadbury also helped establish the first US UAV coverholder in Lloyd’s, while assisting in the development of the first stand-alone UAV privacy and trespass product with Principia Underwriting. Today, Gadbury regularly attends and speaks at UAV trade shows, conferences and events.
TOM HILTON Property underwriter ANV SYNDICATES Age: 27
Finding a career path suited to his analytical skills that offered accountability and progression, Tom Hilton jumped into the insurance industry in 2012, when he joined ANV shortly after the company was formed. A member of ANV’s property team, Hilton focuses on the open market risks associated with the property portfolio. Since joining the company, Hilton’s team has experienced income growth from £3m to £30m GWP in four years. A member of Lloyd’s Non-Marine Under 30s committee, Hilton is involved with arranging educational and social events for young professionals in the market. A keen sportsman, Hilton spends his spare time playing and watching football, cricket and golf, and is a playing member of the Lloyd’s Cricket Club and the Lloyd’s Football Club.
LUCY ELLIOTT Managing director ELLIOTT WESTLAND INSURANCE BROKERS Age: 26
“I [was] brought up in a household that eats, sleeps and breathes insurance,” says Lucy Elliott, who would spend weekends and holidays throughout her teenage years helping out at her father’s north-east brokerage office. In 2014, Elliott entered the insurance business full-time at Elliott Westland Insurance Brokers, where her efforts have been instrumental in the brokerage’s turnover growth from £1.5m to £3.5m in just a few years. Her development of a “marketing think tank” within the office also resulted in heightened awareness of the brand and new business for the company. Involved in many trade organisations, Elliott keeps connected to her community through the Charity of the Year Initiative, a program she originated at her brokerage. “This year we are supporting a local charity named the Percy Hedley Foundation. I took a team of three people on a volunteering day at Percy Hedley’s premises where, as a group, we repainted their library and changing room areas,” she says. “We signed up for Percy Hedley’s Challenge 500 and I have committed to raising £1,000 for their cause.” Additionally, Elliott encourages the staff at Elliott Westland (and herself) to participate in various sporting events annually on behalf of charities.
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SPECIAL PROMOTIONAL FEATURE
CYBER INSURANCE
Why it’s time to go cyber Cyber insurance is seen as the next big thing – but do brokers know how to sell it?
THERE AREN’T many types of insurance that carry quite the same hype as cyber insurance. If you believe the promotion then the product is on a rapid ascension – one that could even place it among a ‘big three’, along with car insurance and home insurance. “There will come a time when it
terrific position to capitalise on a rapidly developing market, as long as they are well prepared.
The sales pitch According to a UK government survey in 2014, 81% of large corporations and 60% of small businesses suffered a cyber
“It’s all about finding the relevant exposure points for each industry” James Burns, cyber product leader, CFC Underwriting becomes a standard part of insurance,” says Neill Johnstone, managing director at Lorega. “It will become something that people automatically select as part of their protection. The average profi le for cyber criminals is their early 20s and they are committing tens of thousands of crimes from their beds – they don’t even need to go out and burgle anyone these days. I can’t see cyber criminals having less activity so the need for insurance will only grow.” Where there is grow th, of course, there is opportunity – brokers are in a
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breach. The average cost for large businesses ranged from £600,000 to £1.15m, while for SMEs the average cost stood at £65,000 to £115,000. Despite these figures, research from Aon Risk Solutions in August 2016 found that while 31% of SME decisionmakers considered developing an online presence a key opportunity in the year ahead, just 7% had cyber insurance. Clea rly, the message about the importance of cyber insurance is yet to get across – so how can brokers change this? “It’s all about f inding the relevant
exposure points for each industry,” says James Burns, cyber product leader at CFC Underwriting. “Manufacturers, for example, have a huge potential system business interruption exposure, while retailers are exposed to breaches of payment-card data. Businesses of all sizes are increasingly the victim of electronic funds transfer fraud – something hitting SMEs particularly hard. All of these risks can be insured against with a cyber policy, but different businesses will be purchasing policies for diff erent reasons. We need to make businesses aware of their specifi c cyber risks and provide them with an insurance solution accordingly.” Adrian Scott, the head of cyber liability at Pen Underwriting, says: “Brokers should identify appropriate products and insurance providers that offer simplicity and ease of access, while also providing brokers with the necessary support and education. “Cyber is a specialised area that not everyone will be comfortable with, so being able to access supporting resources is crucial. Brokers can then provide a clear outline of coverage, exclusions and terms to address each client’s specific cyber risk.” Beazley’s UK and international breach response manager, Sandra Cole, adds that “brokers also need to attend meetings armed with statistics and real-life case scenarios in order to demonstrate how risk transfer and specialist help from an experienced insurer can make all the difference to a company following a breach”.
The risks There is a fear among some brokers, however, about potential mis-selling. Many have claimed to lack confidence about selling such a new product, while there also appears to be confusion about the type of claims that are made. In the US,
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where the insurance policies are already well established, cyber claims are generally driven by data breaches, whereas in the UK, different threats are often just as prevalent, including network interruption, extortion and system failure. However, Cole believes the risks of taking the wrong approach can be averted by using specif ic knowledge of your clients’ businesses. “This is a new area and, as such, brokers need to ensure that they understand their clients’ businesses – not only how much
data they hold but where they hold it and what arrangements they have with thirdparty vendors,” she says. “Given the complex nature of global regulation that can apply to data breaches, brokers need to understand whether their clients have global exposure. They need to understand the policies that are available, including any exclusions that may be of particular significance to their client.” Scott, meanwhile, believes that brokers shouldn’t be afraid of leaning on insurers for help – making it vital to choose the right
providers to work with. Brokers should look for those who not only fully understand the evolving nature of cyber risks but also want to both support and empower their distribution to provide effective client protection. “Go for those with skilled, experienced underwriters that are keen to share their knowledge and educate brokers in being confident at outlining products for clients, while ensuring specialised technical support can be quickly and easily accessed and consulted,” he says.
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SPECIAL PROMOTIONAL FEATURE
CYBER INSURANCE
CYBER BREACH – A GROWING THREAT 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
81%
60%
Large businesses suffered a cyber breach
Small businesses suffered a cyber breach
Source: Association of British Insurers statistics for 2014
THE COST OF CYBER BREACHES
£600k-£1.15m
£65k-£115k
Average cost of a cyber-security breach for large businesses
Average cost of a cyber-security breach for SMEs Source: Association of British Insurers statistics for 2014
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Choosing the right policy So how do you know that an insurer is providing the level of cover that your client needs? According to Scott one size does not fit all with cyber insurance – and it’s up to the broker to work with the buyer to understand what’s needed. “Developing an understanding of where the buyer’s cyber risks lie, what the threat is that is posed, what could happen as a result of a breach, what their current cyber resilience looks like and what responses they could implement is a good starting point,” he says. “Each industry and, in turn, each company, will be exposed in different ways. Therefore priorities will vary in each and every case, and the most valuable
interruption losses – critical for consumerfacing businesses such as retailers and banks. Policies should also include access to panels of experienced service providers to give insureds the expert support they need in a time of crisis.” Another dilemma facing brokers is whether to sell policies as an add-on or stand alone – with Burns stating there are many advantages to the latter. “Generally, the cover in stand-alone policies is broader and available limits tend to be higher. Lots of add-ons tend to be sublimited or at least sublimit certain key areas of coverage,” he says. “Perhaps more importantly, when a claim does arise, a stand-alone cyber policy means you have a
“Brokers need to attend meetings armed with statistics and real-life case scenarios” Sandra Cole, UK and international breach response manager, Beazley aspects of a cyber policy will align with that understanding.” Burns, however, believes there are certain policy aspects that are likely to apply to the bulk of SMEs. “I’d say that comprehensive cybercrime is a key aspect of cover that needs to be looked for these days. Funds-transfer fraud, phishing attacks, social engineering are all areas where we’re seeing a sharp uptick in claims and it’s affecting businesses of all sizes, across all industry verticals and across multiple territories,” he says. “It’s important that policies address both know n and emerging threats, including cyber extortion and deliberate denial of service attacks,” Cole says. “Good policies will afford coverage for business
specialist cyber insurer with experience in managing cyber incidents to support the client and manage the response. If the cover was purchased as an add-on, then you will likely have your cyber incident managed by an insurer with little to no cyber claims handling experience.” While preparation is the key, and it’s vital to think specifically about your client’s needs, there is little doubt that cyber has become the emerging market for brokers and insurers alike. Cyber security, data protection and risk transfer are on the agenda of every organisation, from the boardroom down and, with the right preparation, brokers are in the position to become the first line of protection and reap the rewards.
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FEATURES
BROKER PROFILE
Putting the human element first Debbie Airey, of Country & Commercial Insurance Brokers, shares her remarkable story of broking in the farming sector – from milking cows to being friends with a goose on Facebook
MOST BROKERS will tell you that it’s the personal approach that separates them from direct insurers – the ability to tailor policies for individuals and put their needs first. However, when it comes to agricultural broking that human element goes much, much further. “One of the farmers I insure got stopped by the police and when they asked, ‘Who are you insured with?’ he said, ‘Debbie’,” says Debbie Airey, managing director of Country & Commercial Insurance Brokers. “They said: ‘No, which company?’ He replied: ‘I don’t know – just Debbie.’ ” For Airey establishing that personal connection came naturally, as she grew up on a farm in a rural community and knows all about her clients’ unique lifestyles. “I was brought up on a farm as a child, lived in the middle of nowhere and grew up in a rural community where everyone knew everyone else,” she says. Airey was involved on the farm from the age of six, feeding cows before she went to school in the morning. As the youngest of three children, she was also assigned with a unique job.
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“From the age of eight I was driving a tractor up and down in straight lines on the field because you always had the weakest one driving the tractor,” she says. “It is a fantastic upbringing for a child – so much so that I have actually moved back out to the country and brought my children up in a rural area.” Her road to insurance was lined with more bumps than the typical farmer’s driveway. She originally wanted to be a travel agent and recalls travelling to Blackpool and going into every office in the town until someone gave her a job. Her employer promised to send her to college, too – but when they failed to live up to the commitment she “had a little strop” and went into the job centre, soon securing a position at Swinton Insurance,
at the age of 16 for just £40 a week. From there she moved to AA Insurance and recalls her interview vividly. “One of the questions was: ‘You live quite a way from Blackpool. If we had bad weather, how would you get into work?’ ” she says. “I said: ‘Well, my dad will bring me in the cattle wagon.’ They fell off their chairs laughing and said: ‘Well, what if the cattle wagons couldn’t get through?’ I said: ‘I’d come on the tractor.’ I was being truthful and honest – that’s exactly what we would have done. We would never have been allowed to not go to work.” From there Airey moved to work with a local broker, during which time she became the mother of four children.
FAB – FEDERATION OF AGRICULTURAL BROKERS Airey is one of the founders of the Federation of Agricultural Brokers which, she suggests, does things a little differently to the average insurance body. “We have 27 brokers – all agricultural specialists – and we work together as a federation with bespoke products and bespoke training,” she says. “We like to have events together. Last year we did duck herding; this year we did blind car racing and street dancing. We try to be different, but we all work together and support each other in the market.”
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FAST FACTS: COUNTRY & COMMERCIAL Agricultural specialist Year founded: April, 2007 Number of employees: 8 Number of brokers: 5 Number of offices: 1 Headquarters location: Longridge, Preston Gross written premiums: £3.5m Number of policies written in 2015: About 3,500
“If someone has been involved in a fire, the first thing you do is give them a hug. Then you sort out the practical details. You have to put the human element first” “Thankfully, I had a very understanding boss,” she jokes. By 2002, however, she had set up her own company with a business partner. However, she carried out a buyout in 2007, commenting that her partner “couldn’t understand” the farming side of the business as a marine and freight specialist from London. Her company, Country & Commercial Insurance Brokers, based in Longridge, near Preston, was recently acclaimed as the
Specialist Broker of the Year, an accolade that Airey puts down to her personal style of doing business. “I’ve been chased around a table by an 80-year-old guy when his wife wasn’t at home,” she says. “I was met at the end of a two-mile track by a quad bike when the weather was bad and I was holding my folder while hanging on to this rather buxom farmer’s wife going up two miles freezing to death.
“I even know one farmer who has put a profile of their goose on Facebook – so now I am friends with a goose on Facebook. “But that’s the personal side of agricultural broking – if someone has been involved in a fire, the first thing you do is go and give them a hug. Then you can sort out the practical details. You always have to put the human element first.” Despite the success of her company – which Airey notes now writes about £3.5m in premium income and recently won a contract to wholesale to the COBRA Network – she will never forget her farming roots. Indeed, her own home was even converted from a pig sty. “We don’t farm but I had to live in the country,” she says. “That community spirit is not found in towns, and I think that is why we’ve done well in what we’ve done, because as a broker we’ve been involved in the community.”
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FEATURES
HIGH NET WORTH CLIENTS
HNW: The next generation A new generation of high-net-worth clients is emerging – but what do they expect from their insurance brokers? LAZY, ENTITLED, delusional and narcissistic – those are the rather unpleasant stereotypes that float around the generation born since 1980, dubbed millennials. However, as this issue of Insurance Business UK is proving with its focus on the industry’s successful young guns, the reality is that they can be motivated, innovative and, above all, leaders. The need to separate the truth from the fiction when it comes to young people isn’t just necessary in the search for new hires – it’s also necessary in the search for new clients and particularly the new generation that has amassed a high-net-worth.
Putting a name on the value Mid net worth (MNW), high-net-worth (HNW) and ultra high-net-worth (UHNW) have become buzz terms similar to the word millennial itself – but understanding the differences between the classifications is crucial when starting to understand your customer. “In general terms, the criteria for each proposition is defined by the sums insured, with each proposition having increasing levels of personalisation and less standardisation as you move up the wealth spectrum,” says Mark Coffey, managing director of Oak Underwriting.
HNWI ON THE RISE
10,400
The number of UHNW individuals in the UK – people with assets of £20m or more – according to London-based research firm WealthInsight in 2015.
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50%
The predicted share of the world’s wealth owned by the richest 1% of the planet’s population, according to Oxfam.
“The approach for HNW and UHNW is focused around the client with high levels of personalisation, a personal face-to-face relationship with very few insurer-imposed conditions and the highest level of cover provided within the policy wording. The approach for MNW customers is much less personalised but with superior wording and policy limits than the standard market, and the ability to structure the coverage more accurately for valuable items or collections. Quality of service underpins all of these propositions, including the claims speed of service and payment philosophy.” Adrian Ewington, Home & Legacy’s underwriting and markets director, believes that there are some key similarities across the groups. “They all tend to have a certain level of risk awareness, and an understanding of why we expect them to be open and honest with us in terms of their disclosures,” he says. “Another consistency is their expectation for an extremely high level of service – fast response times and high customer satisfaction rates. Clients have a right to expect excellent service when they are paying for a high-quality product.”
Demanding but different So what differentiates a millennial HNW client – typically under the age of 35 – from those from an older generation? Lennox Bunting, London market manager at Zurich Private Clients, believes that time is of the essence with the next generation. “The next generation is undoubtedly more tech savvy but this has not changed their attitude and approach to insurance,” he says. “That said, there is a higher expectation on service, especially around delivery of documents – no one has time to wait around for more than 24 hours to receive a quotation or a simple policy endorsement.” “Both demographics are demanding in
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“Brokers must understand the entire proposition of any insurer that they recommend” Mark Coffey, managing director, Oak Underwriting terms of customer service, but in different ways,” says Ewington. “The younger generation expects insurance providers to be available 24/7, with electronic access to policy documentation and more ways of getting in touch, like web chat. Whereas the older generation tends to favour the more traditional routes of getting in touch with us and may appreciate receiving documentation in the post. “That said, the younger generation does still want to develop a relationship with a provider that can grow with them.”
While nobody can predict the future, research in the area of consumer purchasing seems to suggest that the next generation firstly decides how they wish to buy before deciding what to buy – this, according to Coffey, should push brokers to look at new, more digitally focused ways of presenting their business. “The HNW market has traditionally not given the client any choice, leaving the broker market as the only option,” he says. “As the world continues to become ever increasingly digitalised, it is logical to conclude that
younger clients will want to engage with their insurer in the same way. This presents an opportunity to create digital solutions in the HNW space. “However, while it is relatively easy to envisage this within the MNW lower end HNW market, the UHNW space is unlikely to change due to the complexities and exposure these clients present.”
Time to be tech-focused? With a digitalised generation comes a host of new technologies to insure – ranging from wearable technology to digital art. The emphasis appears to be on the broker to try to educate themselves in these new areas to capitalise on their potential. “Ever improving technology brings emerging risks that must also be understood and managed by all parties,” says Bunting. “For example, digital art with customer
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FEATURES
THE RICH KIDS
TOP DRIVERS OF MILLENNIAL CUSTOMER ENGAGEMENT Ease of payment features Keeping an account and personal information secure Ease of managing account Ease of making changes to coverage Ease of access to policy information 0% 10% 20% 30% 40% 50% 60% Source: Gallup panel web and mail study conducted 4 Dec 2013-14 Jan 2014
records kept in the cloud could be susceptible to data breach by cyber attack. Likewise, wearable technology that would hold personal information could be susceptible to a malicious attack. The issue around where liability for the insurer starts and stops is one we’re particularly alive to.” Coffey, however, believes that although new technologies have emerged, most should be straightforward to insure – and customer behaviour is still largely focused on the same areas. “Most policy wordings in place will automatically cover wearable technology and similar types of newly available products. Therefore, there is no observable trend in this area,” he says.
from their mother and father. An American magazine once described millennials as less “two-point-four children” and more “four buddies and a dog” – and while this contrast may be less pronounced among high-networth customers, there is a real need to understand the customer on a personal level. “Get to know your client; understand their passions and interests,” says Ewington. “And, importantly, understand their lifestyle. Many high-net-worth individuals may be cash rich but time poor. Savvy brokers know the market and the products available well. They’ll know which insurers and providers have an appetite for the different types of risks their clients present.” Coffey agrees that it’s up to brokers to take
“Get to know your client; understand their passions and interests and, importantly, understand their lifestyle” Adrian Ewington, Home & Legacy’s underwriting and markets director “However, one observation is simply that customer purchasing behaviour tends to remain relatively unchanged in comparison to previous years, with newly acquired property, jewellery, art and cars being a constant, albeit with some minor fluctuations and variations within each area.”
Winning them over According to a Gallup survey in 2015, millennials are the least likely generation to be engaged with insurers and are also more than twice as likely to buy their insurance online. However, there is some hope for brokers – particularly if they have insured the millennial’s parents in the past – as families generally influence their choice of insurers. The key, however, even in these cases, is to try and understand that the client is different
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the lead and be fully aware of their customer’s nuanced insurance requirements. “Put simply, brokers should understand the demands and needs of each client and match a suitable product accordingly,” he says. “Of course, this requires a probing discussion to gain a true picture of what the client’s insurance needs are currently, and are likely to be in the short-term future. “This also implies that brokers must understand the entire proposition of any insurer that they recommend. “This should go wider than wording/ coverage and also include the f lexibility, quality of service and overall trust in the insurer’s ability to satisfy the customer at any point of contact – in particular if they need to make a claim.”
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PEOPLE
CAREER PATH
TOP OF THE WORLD
The course of his career makes it clear that there’s not many goals that David Newman can’t reach, and that includes the North Pole by foot He starts at Britannic, as an insurance agent, beginning a rise through the ranks to become head of marketing and channel management, before joining Chase de Vere Investments as marketing director and then interim managing director. He goes on to hold his first board position at Chase de Vere. During this time, he earns an MBA from the Open University.
1989
BEGINS INSURANCE CAREER AT BRITANNIC
2000
PART OF THE TEAM THAT CONQUERS THE NORTH POLE As Britannic’s head of marketing, Newman was one of a team that, in a world first, successfully flew a Rozière balloon made up of a helium cell surrounded by hot air to the geographic North Pole. The trip was recorded in the book At the Mercy of the Winds and the documentary Skies of Ice. Newman’s role involved communication and firearms for “safety against polar bears, of which there were plenty”.
2015 IS APPOINTED TO GOVERNMENT COMMITTEE This year – the same year Carole Nash celebrated its 30th anniversary – Newman is named a finalist in the North West Director of the Year awards, and is appointed a member of the Pre Pack Pool, a body composed of business experts gathered to offer their expertise on insolvent businesses in light of recent cases that undermined public confidence. “Nineteen business experts were picked from various industries, and I was asked to join. It’s interesting and an honour.”
BUYS THE FARM The earlier stages of his successful career having taken him to many regional offices, he put down roots in Herefordshire, where he later bought a 500-yearold farmhouse close to what he considers to be the three best mountain ranges in the UK. “The way I relax is to be outdoors. The Brecon Beacons was my second home at the weekends.”
2003 JOINS CO-OPERATIVE, SMILES Newman joins Co-operative Financial Services, where he went on to hold a number of roles, including marketing director of The Co-operative Bank, Co-operative Insurance and the groundbreaking smile internet bank. “It was the first internet bank; it was a really exciting brand to work on. It was all about the early adopters of internet banking, which we now all take for granted. These people were really breaking the mould by moving away from the bricks and mortar bank.”
2007 JOINS CAROLE NASH Appointed managing director of specialist insurance brokers Carole Nash in September 2007, in 2012 Newman became CEO of the top-40 insurance broker and in 2013 also a shareholder. The insurer, which boasts a staff of 400 in Manchester and 30 in Dublin, specialises in specialist vehicle insurances, primarily by way of telephone and internet distribution. “We insure over 25% of all motorcycles in the UK; we also do classic cars, kit cars, anything that we would call enthusiast wheels.”
2000
2010 TREKS TO THE NORTH POLE The same year he became a non-executive director of the Insurance Fraud Bureau, a non-profit organisation to detect and deter insurance fraud, Newman raised £25,000 for two motorcycle-themed charities by taking part in a trek by foot and ski to the geographic North Pole.
I’d spent a lot of time in the Arctic but never gone to the pole itself; but I had the opportunity and the chairman of the company was very supportive. It was an amazing experience www.insurancebusiness.co.uk
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PEOPLE
OTHER LIFE
TELL US ABOUT YOUR OTHER LIFE editor@insurancebusiness.co.uk
LIGHTS, CAMERA, INSURANCE From modelling to running her own business, PremFina’s Karolina Komarnicka has done it all MOST PEOPLE come into insurance via a graduate scheme or following a work placement from their university. Not many come via the glamorous world of modelling and the internationally renowned brand Abercrombie & Fitch. That, however, was the case for PremFina’s marketing manager Karolina Komarnicka. “I got scouted on the train, it was very random,” she explains. “I thought: ‘Why not … just go for it.’ And I went along for the casting. “It was fun. I did mostly catalogue and in-store marketing. I was promoting the brand by working in the clothes. We would sit outside the store in the clothes and people would take photos with us. It was quite unique but also quite tiring.” As a student, Komarnicka juggled a fashion career and marketing, taking intern positions at several firms while also modelling for lingerie brand Gilly Hicks and working as a fashion co-ordinator for Bodymetrics. Today, her ‘other life’ takes on a new form as one of the founders of a business developing a fitness application.
Prize-winner
She won the Helen Maurice prize for outstanding achievement at university.
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Traveller
Komarnicka was raised in Warsaw and came to the UK as a teenager.
Founder
She is the founder of a business creating a fitness application.
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We’ve started by making key improvements to our Shop & Salon and Office & Surgery It’s important to us that our commercial offering continues to give you and your small policies, which include: a combined sum insured with an automatic 20% uplift, removal business clients the protection they deserve. That’s why we’re enhancing our SME policies, of average, and increased business interruption and public and products liability limits. giving them a level of cover your clients can rely on. For more information enhancements we’re speak to your Aviva We’ve started by makingon keythe improvements to our Shopmaking, & Salon and Office & Surgery sales manager or visit broker.aviva.co.uk policies, which include: a combined sum insured with an automatic 20% uplift, removal of average, and increased business interruption and public and products liability limits.
Retirement Investments Insurance Health
For more information on the enhancements we’re making, speak to your Aviva sales manager or visit broker.aviva.co.uk Aviva Insurance Limited, Registered in Scotland Number 2116. Registered Office: Pitheavlis, Perth PH2 0NH. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Retirement Investments Insurance Health Aviva Insurance Limited, Registered in Scotland Number 2116. Registered Office: Pitheavlis, Perth PH2 0NH. Authorised by the Prudential
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