Changing of the guard

It is a time of rejuvenation across the insurance industry, with an unprecedented number of new chief executives recently appointed at general insurers and top insurance broking houses.
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The industry will be watching with interest as these chiefs steer their ships through turbulent waters and ready them to face future challenges and build on the individual strengths of their enterprises.

Insurance and Risk Professional was fortunate to spend time with these new leaders to find out their plans for their businesses, their take on the state of the industry and their advice for brokers who have set sights on higher rungs of the corporate ladder.

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Mike Cutter, chief executive, OAMPS

Previously chief risk officer at ANZ

Alexandra Cain: What are your plans for the business?

Mike Cutter: One of the keys to our past success has been our national footprint. While we have most of the country covered there are a number of regional markets that could do with greater representation so I will be actively seeking out acquisition opportunities to both complete our footprint and deepen our offering in certain locations. We’re also planning to develop unrivalled, deep and consistent expertise in a number of industries to complement our existing capabilities in transport, construction, media, rural and sport, to name a few.

Our business has a great opportunity to exceed market growth and my job is to ensure our brokers can make the most of this opportunity.

AC: What does your appointment mean for brokers? 

MC: I have spent the vast majority of my first two months in the branches with our brokers and their support teams. Having visited every state, it is clear we have an expert workforce of brokers who exhibit a tremendous passion for their clients. They require support to maximise the opportunity in their individual markets and this is a major part of my role.

We will be looking to improve all elements of our value chain to ensure brokers have great product, great insurer access, efficient systems and clear insights into our clients’ businesses and industries, to help our clients get the right insurance coverage at the best available price.

The quid pro quo is that I will expect our brokers to be proactive in helping our central team develop our capability. Honest and open input will be sought and I will expect them to deliver. Having spent some considerable time with them so far I have no fear of being disappointed.

AC: What will be the defining features of the insurance sector in 2013?

MC: We have just witnessed another summer marked by significant weather-related claims events. The financial impact on insurers appears to be well within expected catastrophe loss allowances. Importantly, their response to claims by clients has been very good overall. We are continuing to see many insurers go through a ‘cleansing process’ of re-rating problem areas, including exiting or limiting exposure to higher risk regions. Recent results are showing profitability is returning to insurers, driven partially by premium rate increases as well as operational efficiency initiatives.  Barring any significant loss events, we anticipate insurers will start to trade off their current focus on margin improvement by switching focus to increasing volume, which in turn means more competition and good news for our clients.

AC: What are the best and worst things about being a CEO? 

MC: Being a CEO will not suit everyone but it certainly appeals to me. The biggest challenge is the breadth of the role. I like to have a deep understanding of the key drivers of any business I run and also keep a close eye on the major opportunities and risks. Consequently, there is a large amount of material of which I need to keep abreast, both internally and from the broader insurance industry.

There are many great aspects to the role. Hopefully there are plenty of occasions to celebrate success across different parts of the business. Having said that the part of my job I enjoy most is working with and developing great people. I get to work with people with hugely diverse backgrounds, expectations and desires – seeing them succeed and grow brings satisfaction.

AC: What are your tips for brokers who have ambitions to hold a senior role? 

MC: To progress, the major requirement is to perform in your current role. Assuming the individual is performing they need to make sure they have expressed their desire to develop their career. They also need to demonstrate a willingness to make or take opportunities that allow them to develop skills and experiences required in more senior roles.

Maximise your exposure to senior leaders, deeply evaluate opportunities and take a fair degree of career risk. Identify the key dimensions of the role that you want in the medium term and evaluate current capabilities against this list and develop a very clear but actionable development plan that covers as many of these gaps as possible. Mentors, secondments, projects and lateral moves are all very valuable ways of gaining skills experiences that can help you progress towards your longer term goals.

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Niran Peiris, Managing Director, Allianz

Previously CEO of Allianz Australia Life Insurance

Alexandra Cain: What are your plans for the business? 

Niran Peiris: We’re focused on continuing our current winning strategy with personal, small business and workers compensation insurance. We will continue to access those lines of business through multiple distribution channels.

We’re also concentrating on disciplined underwriting and cost control, underpinned by our culture and people, engaging them around customer focus, which is key to our success.

AC: What does your appointment mean for brokers?

NP: We have recognised we’re underweight on the broker side of our business and we intend to address that through our market-facing capabilities and recent changes to our structure and broker team. We’ve added two managers for our northern and southern regions to connect with brokers and do more business with them. We want to build that over the longer term.

AC: What will be the defining features of the insurance sector in 2013?

NP: The current low interest rate environment will continue to be a feature, which means affordability will remain a concern due to the need for premium rises to offset lower investment returns. We are seeing this in pricing for flood and strata insurance in northern Queensland.

The need to increase prices to offset lower investment income is resulting in a greater regulatory focus on pricing and affordability, for instance around CTP in New South Wales, where a scheme review is being conducted with the Governments stated aim being to reduce prices by 15%.

 The customer is at the centre of everything. They will be your guide on how to act and how successful you will be.

AC: What is the best and worst thing about the role?

NP: It’s still early days but I’m enjoying the chance to shape strategy, working with our senior people and making sure the business is aligned with that strategy. It will be great to see our strategy yield success down the track.

I haven’t been in the chair long enough to comment on the worst parts.

AC: What are your tips for brokers who have ambitions to hold a senior position in their organisation?

NP: No specific advice, just work hard and be consistent in your relationships and form good relationships. Figure out who your supporters are and be customer-focused because the customer is at the centre of everything. They will be your guide on how to act and how successful you will be.

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Roger Wilkinson, chief executive officer, Willis Australasia

Previously chairman and CEO of Willis Asia Pacific, Middle East and Africa

Alexandra Cain: What are your plans for the business? 

Roger Wilkinson: Our plans are around growing the business in Australia, in a number of ways. These include generating new business and acquiring people, as well as business related to those people. We are looking at books of business for potential acquisition. Although this is more problematic because the multiples paid by other business for brokers seem high.

AC: What does your appointment mean for brokers? 

RW: Our people are happy there’s an experienced broker at the top of the business, as well as someone who is an experienced CEO. I’ve have been a CEO for a long time for a number of different companies. I believe in full transparency and I’m a no-nonsense, pragmatic person, which is something people appreciate in Australia. I have a direct approach to running the business.

AC: What will be the defining features of the insurance sector in 2013?

RW: In a word: competition. Insurers have considerable underwriting targets, so there will be an enormous amount of competition this year and next.

There will be an enormous amount of competition this year and next.

AC: What is the best and worst thing about being a CEO?

RW: The best thing is the feeling of success and seeing a business succeed.  It’s also rewarding to see people grow, as well as give them the opportunity to run their own business. It’s about creating an environment in which people can mature, giving people trust and monitoring them.

The worst part can be that it’s lonely because there are not a lot of people you can talk to. Having to make difficult decisions about people is another hard part.

AC: What are your tips for brokers who have ambitions to hold a senior position in their organisation?

RW: My best advice is to be yourself. If you try to be someone else people will see through it. Don’t try to be like your predecessor. Know your people and your direct reports and maintain client and market involvement, so you’re aware of what’s happening in the environment and what’s impacting them. Make sure you can speak about a broad range of topics and have a good general knowledge. I’ve lived in a number of different countries and people can relate to that experience.

If you have ambitions, get a business coach. If you’re one or two steps away from being a CEO there are a lot of people who can help you transition into that role. If you’re more junior get a mentor and transition to a coach later on.

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Mark Searles, CEO, Austbrokers

Previously general manager of Austbrokers

Alexandra Cain: What are your plans for the business?

Mark Searles: We plan to continue to be a fast growth story. We are well placed to continue to grow and that’s what my job is about. We’ve been growing for 25 years and my overall aim is to continue to grow as a listed entity.

AC: What does your appointment mean for brokers?

MS: We have a joint venture partnership model and my aim is to ensure the services we provide brokers are second to none. I want anyone considering partnering with us to do so because of the nature of the services we offer.

I have conducted an operational review and recognise there are lot of opportunities to develop services that are useful to brokers that will help their businesses. Our conference was an opportunity to share the outcomes of that review and highlight what we’re doing for the next 12 months.

AC: What will be the defining features of the insurance sector in 2013? 

MS: The industry is waiting to see what the Steadfast IPO means. This is part of the consolidation of the market and we’re waiting with interest to see the impact of that.

The market will also react to the natural disasters we saw earlier this year. It’s a complex market, so we will see what the consequences of those events are down the track.

AC: What is the best and worst thing about being a CEO? 

MS: The best part is that success and failure end with you. You can lead effective change and it comes down to you to make a difference.

The worst thing is being time poor. Everyone wants a slice of your diary, which requires a good ability to prioritise and manage your time. It’s a 24/7 job.

Everyone wants a slice of your diary, which requires a good ability to prioritise and manage your time. It’s a 24/7 job.

AC: What are your tips for brokers who have ambitions to hold a senior position in their organisation?

MS: Always make sure you are relevant to your customer and your organisation. Never lose sight of the end customer because they are the ones who pay us. Stay grounded and relax when you can. Just enjoy life and be relevant to your customer.

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Daniel Fogarty, CEO, General Insurance at Zurich Australia and New Zealand

Previously chief operating officer of Zurich Australia and New Zealand

Alexandra Cain: What are your plans for the business?

Daniel Fogarty: We’re on a journey to improve our business model to better interact with brokers. This started with our business packages for small business and we’re now the leader in commercial packages. We’re all about making sure we give brokers what they need and making it easier for them to do business with us. We’re also the leader at the big end of town. As a global insurer, our focus is on bringing the benefits of being a global insurer to the Australian market, especially for big corporates. Our strengths in marine and commercial motor insurance are well known.

We’re also very focused on the claims process and making sure customers get the right access to services at claim time.

AC: What does your appointment mean for brokers?

DF: Having an Australian in charge of an international company is good for brokers. My personal approach is highly consultative because brokers are our main distribution channel. So I like to get out as much as I can to spend time with brokers.

I’m also on the board of the Insurance Council of Australia and on ICA’s NIBA broker subcommittee, which shows how committed I am to making the industry work for brokers. We provide a lot of broker education and I want to continue doing that.

AC: What will be the defining features of the insurance sector in 2013? 

DF: There has been a lot of discussion around mitigating climate and environmental risks. It’s good the mainstream media is getting people ready to protect themselves in the event of risks such as fire. The industry welcomes the federal government’s $100 million funding over two years for flood mitigation projects.

Underinsurance remains a big issue as it’s reported that 60 per cent of small businesses don’t have business interruption cover. We’re trying to work with brokers to help customers understand their risks.

The low interest rate environment is also topical as it affects our ability to generate revenue, which impacts both brokers and insurers.

Cyber risk and technology is an opportunity and a threat. The risk of a hack attack on any business is an issue. But we also have a great opportunity to use technology in the insurance industry to increase connectivity. Brokers can use technology to better manage their businesses and be more responsive to clients.

APRA’s reforms – especially the Internal Capital Adequacy Assessment Process, which affects how we allocate capital – will be a focus for insurers and APRA as we work through the first year of its operation in 2013.

The best and also the worst thing is that the buck stops with me.  If something doesn’t go right, I’m on the hook.

AC: What is the best and worst thing about being a CEO?

DF: The best thing is dealing with people. In insurance, fundamentally we’re helping people manage their risks, which is very rewarding. The job is also intellectually challenging. Insurance is a complex business, so you need to use your grey matter, especially as insurance is one of the few industries where when you sell something, you don’t know what it will cost.

The best and also the worst thing is that the buck stops with me.  If something doesn’t go right, I’m on the hook – but I am fine with that.

AC: What are your tips for brokers who have ambitions to hold a senior position in their organisation?

DF: I believe in career planning. The best place to start is to think about what you want in life and your career. Roll forward to your 80thbirthday party and think about what you’d like your family and friends to say about you. Start with that because work has to fit in with your life.

If you want to be a senior person, talk to senior people. Find out what they do and what capabilities and competencies you need to do the job well. Then spend time developing those attributes. Volunteer for a strategy project so you understand how to develop strategies. People management is also important so get into a position where you can learn how to do that. Also get yourself in a position where you’re dealing with the market. Be disciplined and planned and do that in a context of what you want to achieve in life.