After 22 years with AON, Peter Harmer joined CGU as its new CEO last October. Insurance & Risk Professional caught up with him to discuss what’s on his agenda for the next year, why it’s important to make insurance a profession of choice and to find out how life is on the other side of the fence.
Martin Wanless: You spent many years with AON. How did your move to CGU come about?
Peter Harmer: I worked with AON for 22 years – in Melbourne, Sydney and, more recently, in London, running the UK operation. I left there in September 2009 to return home and then decided to take a look around at what might interest me next. I had a significant amount of long- service leave, and was enjoying the time off. Mike Wilkins [CEO of IAG] rang me to say he’d like to have a conversation.
I guess I always assumed that if I was going to stay in the insurance industry, which was the preference, it’d be on the underwriting side, not the brokering side. Having spent 22 years with AON, it was impossible to go and work for another broker.
MW: So, how does it feel to be on the other side of the fence?
PH: I started off in underwriting before I joined with AON, so it’s not completely foreign to me. Having said that, 22 years is a long time. But it feels exciting.
From the broking side, I’ve had more of a customer and sales focus, and given that we are an intermediated insurer and our mission is to be the leading intermediated insurer, my knowledge of what brokers require from a carrier, and the pressures they’re under from their direct customers, is something that can benefit CGU.
My knowledge of what brokers require from a carrier, and the pressures they’re under from their direct customers, is something that can benefit CGU.
MW: Do you think you have a more rounded view of the market, given you’ve got experience on both sides?
PH: I think there’s a tendency for insurers to be very product-driven, so coming in from the broking side, you have a pretty good grasp of what customers actually want; what they actually value.
And I guess that’s what brokers pride themselves on doing, as acting at that transformation point between customer need and a product that is manufactured by carriers. So, being able to bring that understanding of the end customer into the business is a positive.
MW: How did you perceive the CGU business as an outsider?
PH: When I left Australia to go to the UK in 2007, it was pretty evident to people in the market that CGU had lost a bit of its identity. There was a mis-match between expectations and delivery.
When Mike Wilkins came on board, three or so years ago, he began a process of devolving many of those functions back into their rightful homes. When I left the country, CGU was a destabilised business with a confused footprint. It was very difficultto navigate for intermediaries.
MW: Has that perception changed?
PH: Now it’s completely different. It’s chalk and cheese. The business still has an awful lot of work to do, but it’s got a really good sense of direction now. It feels like a much more dynamic place today than what it was looking like from the outside four years ago.
MW: What are your top priorities for the next 12 months?
PH: The priority is to make sure we’ve got those value propositions for our intermediaries built, developed and implemented. Over the years, CGU has been a sentimental favourite in the market. We really need to capitalise on that now and make sure we deserve that position. We need to look at ways we can grow more profitably, in the areas we’re targeting, so getting more granular about where we want to grow, on our terms,is important.
We need to identify which channels, which products and which geographies are going to be critical to us, as is becoming a much more leaner and efficient organisation. We have a cost-base that remains a little higher than our competitors’, so we’re continually focusing on ways we can be more efficient.
MW: And what are some of the key challenges for the insurance sector?
PH: The whole flood issue has put our positioning in society generally under scrutiny – and clearly there’s work to be done. The industry has been a bit of a soft target. We need to work harder to raise our image, to improve our profile in the market place. But I’ve heard this said for 20, 30 years, and the time for talk has passed.
We really need to get a more balanced debate going around the role of insurance in particular areas, such as flood. Having said that, I can certainly speak for CGU, and I suspect it’s been the same for industry more broadly. I’ve been really impressed with our disaster response capabilities. We’ve been able to mobilise staff from all over Australia.
I feel the industry can hold its head high yet again; I don’t recall a natural disaster where the industry has done anything other than act with speed and professionalism in trying to restore as much normality as possible to policy holders’ lives.
MW: What about attracting young talent to the sector?
PH: It’s not just about capturing young people at the point of decision making, it’s about actually raising the profile of the industry. And the actual fact that we continue to call it an industry is an inhibitor.
I try as hard as I can to remind myself that it’s a profession, not an industry. But you know, I think Michael Hawker, when he first came on board at IAG after leaving the bank, said insurance is one of the world’s best-kept secrets. And here we are, what, eight or nine years down the track and it probably still is.
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