Manchester IT Pack 2009: Circle of influence

For its fourth event, the IT Pack travelled to Manchester, a thriving regional hub of insurance, to meet some of its most promising brokers.

After an hour and a half of lively discussion, some of the most pressing issues facing the industry had been thrashed out. Brokers say they are being put in an uncomfortable position from dual pricing: offering cheaper rates for fresh business than renewals. Meanwhile, consolidation was on the table again, with many feeling that the sun may be setting on some of the country’s biggest broking empires. As for Manchester itself, brokers expressed their commitment to working in a thriving and exciting city that is clearly going places in the insurance world.

The all-too-rare experience of meeting other brokers as colleagues rather than rivals was something highly valued by the participants. Pavey Group account handler Mark Harris, who travelled up from Devon for the event, said: “I had the opportunity to meet with other young brokers and realise that most of them were facing the same situations as I was. It was also interesting to see and discuss our similar and differing views in the broking industry.”

Bridge Insurance Brokers’ business development manager, Andre Backner, commented: “It is a good networking opportunity and allows you to hear what is going on in the insurance market.”

Price points

Dual pricing was top of the agenda for many brokers. There were concerns that insurers are making brokers look unprofessional, in the eyes of their clients, by having two different sets of pricing.

Swinton Commercial account executive Matthew Stuttard said: “It undermines what you are trying to do and stops a hard market developing. It’s a big problem at the moment, and it is highly frustrating when you’ve had a loyal customer.”

Aviva underwriting and personal lines director Gary Williams commented: “That is a very, very interesting point. In the US, where I came from just a year ago, this model is totally reversed. The new business price over there is typically the highest you pay unless [as an existing customer] you add cover, change stuff, increase your limits or whatever. But here it is so price sensitive and competitive on the new business rate that typically most insurers do not make money in the first year.”

The conversation broadened out into pricing in general, with brokers in agreement that the way forward was a combination of accurate pricing and first-class service to clients.

Natalie Albert, account handler and online developer at Caunce O’Hara, said: “It’s about being there for your client. They call you in the middle of the night, they’ve had a fire and you get up out of bed and meet them, and do everything you can to reduce the pressures on them.”

Total Solutions’ operations director, Ranjeen Kumar Gohri, commented: “It’s about customer service at the end of the day. Delivering customer service to be different – that’s what keeps people with the big boys and it keeps them with small start-ups. It is a difficult market out there.”

Aviva’s director of customer and operational excellence, John Gilbert, said: “In certain lines it is absolutely all about price. If you’re not at the right price point, it doesn’t matter what you do regarding service. This is why Gary and I collaborate very strongly in terms of making sure we’ve got service and process balanced with product and pricing. If we get the balance right, we are going to do very, very well.”

Manchester united

There was a definite feeling that Manchester was a great place for insurance broking, with excellent networking opportunities.

Bridge Insurance Brokers account handler Lauren Hamer said: “It’s a good social scene, as well as within the industry. You get an opportunity to mix with the underwriters and get on a personal level with them, and this obviously helps in the long run.”

Backner commented that Manchester was a smaller, closer-knit community compared to London. He also said that they have even stolen work away the capital. “We have picked up business from London. The client does not care that we are 180 miles away, because we are more service oriented,” he explained.

Overall, despite the recession, the group felt there was still an appetite for their services, albeit with lessening volumes driven primarily by firms going into administration.

Buy now, pay later

The hot topic of consolidation once again reared its head, with the group displaying a general antipathy towards the consolidators. They felt these firms lacked the service levels of smaller independents. On the acquisitive side, Swinton’s Stuttard said the consolidators had over-paid: “I think a big part of the issue has come from consolidators over-paying for brokers, and that’s unsustainable.”

Brokers taken over by consolidators faced a strait-jacket that was not to everyone’s liking, remarked Danyal Naqvi, principal for Total Insurance Solutions.

“You are getting the shrapnel from that as well. We have just taken a couple of guys on. They’re saying they were getting chewed up; their books were getting ripped apart. Consolidators are very strict on how they do the work,” he said.

Bridge’s Backner said he felt that one of the major players would fall on its sword. “I think one of these consolidators is going to go,” he ventured. “I know that might be a bit of brash statement, but as a business model it is unsustainable. As we can see, a lot of these panels are threatening to pull out. They’ve failed to integrate the businesses into their business models. It is going to be beneficial for the independents because there will be a lot of pieces for us to pick up.”

How I made it: John Gilbert

John Gilbert joined Aviva in September last year to lead customer and operational excellence for the general insurance business. His early background in manufacturing has helped him on his long journey to the top, helping to shape a scientific and logical mind well suited for business.

Gilbert’s breakthrough job came when he joined Egg plc, where he eventually became head of operations and led a process engineering programme that made significant cost benefits. He also established and grew non-captive offshore operations in India.

In 2004, having moved to investment bank UBS, Gilbert successfully led a strategy based on making lots of small improvements to boost overall productivity.

Explaining the factors that helped him make a name for himself, Gilbert says: “Integrity is everything and I will never breach or risk this. Beyond that, I work hard to build credibility and a reputation for knowledge and delivery as core traits. I set high standards and am very much a perfectionist, which is both a positive and negative thing at times.”

Gilbert is clearly very driven when it comes to his professional life. He adds: “I think the key to climbing the career ladder has been a clear view of the experience I wanted to gain, a medium-term game plan in terms of industries and areas of specialisation, as well as considerable investment in developing myself and creating the right connections.”

How I made it: Elena Fedotova

Elena Fedotova was born and raised in Uzbekistan (former USSR). At 15 she moved to England to learn the language and stayed on to do her A Levels. She then studied for her bachelors

degree in mathematics and management at the University of Manchester’s Institute of Science and Technology. She first joined Aviva (then Norwich Union) as an underwriting and pricing graduate trainee in 2004, and is now the firm’s fast trade business manager.

Fedotova spent the first two years at the firm moving around different teams, from personal lines pricing to commercial underwriting. During that time, she focused on developing her technical knowledge and also built up contacts around the company, which she says proved to be invaluable in later roles.

A memorable break came when Aviva’s sales and marketing director, John Kitson, offered Fedotova the chance to manage the delivery of high net worth products, which she describes as a “great opportunity”. She most recently moved into the intermediary channel, where she focuses on developing new propositions for brokers.

Of her latest role, she says: “Brokers are very entrepreneurial and challenge us to think in a different way to create new propositions. Alongside this, I have been given the responsibility of managing a team. This is one of the toughest and most rewarding aspects of the job.”

The challenge should stand Fedotova in good stead, however. “You need to have hands-on people management experience to progress within the company,” she points out. “There aren’t many directors without a team.”

Finally, Fedotova’s secret to success? You should be “passionate about everything you do, work hard and be individual”.

How it went: Gary Williams

Aviva’s underwriting and personal lines director, Gary Williams, commented on the Manchester IT?Pack event: “I was really impressed with the range of topics covered and thought that the service ethics of the group were very strong. It was clear that they were all keen to put their customers first.

“It was encouraging to note that, at a time when the market is hard and customers are shopping around more with regard to buying from the brokers (and comparing them to aggregators), these guys were not just focusing on price. Instead, they were keen to look at factors that differentiated them from others; not just on the quality of service but also the quality of the policy.

“The group themselves were passionate about what they do. One of the key aspects to the session was this: here is a very strong group of young people who recognise that they are key to making their business successful.

“I was impressed that Mark Harris had travelled all the way from the South West to attend the session during a period of holiday, because it showed how valued the IT Pack sessions are in giving younger brokers the opportunity to discuss their concerns and challenges with their peers. The sessions flowed very well and the time flew by too quickly. I wish the event was longer so we could have covered more topics.

“It seems too many young people just “fall” into insurance. More needs to be done to get young people interested, because there are so many rich and fulfiling career paths to choose in the industry.”