Steve Hearn: New chairman advocates a ‘continuity of direction’ for PPL

When the initial idea for the market-owned eTrading platform Placing Platform Limited (PPL) was conceived in 2016, Steve Hearn, who was chairman of the London Market Group (LMG) at the time, was also involved on the backbenches.

Now, after having been brought forward by his predecessor Bronek Masojada, who was PPL chairman from March 2018 until July 2023, Hearn took the helm as chairman in August 2023.

Speaking exclusively to Insurance Times, he says: “The arrival of a new chairman is an opportunity to instigate a review, however it is not necessary in this case that there’s some radical change in direction of the organisation.

“PPL has been critical to our marketplace, particularly evidenced at the time of the pandemic.”

Taking on this chairmanship has been somewhat of a “delight” for Hearn because he counts his previous two chair positionsat the London Market Group (LMG) and the London and international Insurance Brokers Association (Liiba) as “some of the most rewarding experiences” he’s had.

He continues: “Part of the attraction of PPL for me was going back to that time that I found so rewarding.”

Despite some developments at PPL, part of the job for Hearn is “underlining that this isn’t some massive change of direction or pivot, but a continuity of direction that was set many years ago”.

“And we now move ahead into execution of the ambition that’s been at the forefront of a very original conception,” he adds.

The PPL eTrading platform has a “unique construction” in that it is owned by market participants, including brokers and underwriters from three trade associations – the Broking Association, the International Underwriters Association and the London Market Association.

Hearn adds: “PPL is a business owned by its market and works with more than 200 broking firms and underwriting companies in the way it operates.”

Bigger opportunities

Despite ongoing digitalisation in the insurance sector, Hearn is keen to emphasise his view that humans will always play an intimate part in the insurance journey.

Referring to other areas of financial services, such as bond trading, that were previously run on face-to-face interaction but became digital some decades ago, he says that humans are still needed to manage “significant relationships” and build algorithms.

For Hearn, however, there is a “bigger opportunity” as the market heads towards further digitalisation and evolves its business models.

He adds: “There is an opportunity here with data at its heart to create a trading exchange and that is something that we continue to aspire to and pursue for the marketplace that we sit in as a very significant opportunity for now.”

Having witnessed the emergence of Direct Line back in the 1980s, Hearn explains that customers previously purchased their insurance from high street insurers.

He says: “All those brands are still around but their business has completely evolved into telebroking and big call centres and now to the internet. On our phones, we buy financial services or bank. This is what has happened in motor, household and travel insurance, but specialty insurance is different.”

He explains that specialty insurance deals concerning lines such as satellites, aviation and energy risks are “complex by the nature of the risk itself”.

Hearn adds: “PPL could become the global centre of digital trading. We have the opportunity to define the digital world that is digital specialty insurance. I don’t see the dislocation of employees and closing down of premises, that is not the future.

“Human beings soliciting trading continues to be a feature of our market for decades to come, no question.”

Hearn says that what will change, however, is the way that humans in the workplace do tasks.

He recalls March 2020, when the UK went into lockdown due to the Covid-19 pandemic, that the market continued to trade the very next day thanks to eTrading platforms such as PPL.

Now, however, Hearn believes the market is moving to a more “hybrid model” that combines both face-to-face trading and digital trading.

He adds: “Technology replaces some of the activities that people were doing manually, that will continue. But that doesn’t mean that we replace the important parts of placement, trading, claims and advocacy that humans do. That’s what’s happened in other forms of financial services.”

Technology play 

Hearn has been a broker throughout his insurance career and has held senior positions at broker giants Marsh and Willis.

For example, he was UK chief executive of Willis in 2012 for ten months, before stepping down and taking on a deputy chief executive and president position.

Leaving Willis, he joined Ed Broking as its chief executive, which was later sold to Ardonagh in 2021.

For Hearn, there is a “huge duplication” of tasks in the insurance marketplace, such as rekeying information.

Technology can be an efficiency play here and ”can help remove some of the economic burden that comes from efficiency” he says.

In addition, developing secondary market and derivative products can piggyback on the back of this improved efficiency. 

Referring to his overall vision for eTrading, Hearn says: “My vision would include efficiency, economics and growth. But we have an opportunity to create ‘the’ exchange in specialty insurance –  that is our opportunity and PPL can be part of that along with its other constituents.

“PPL has an important role to play because it’s the start of the process. The capture of the origination of the risk and the transfer of that data to the customer or the underwriter to create a firm order.”

He finishes: “It can only be a matter of time before even the most complex of risks are able to go fully digital.”