Thank you for talking to Irish Broker Enda. Can you tell our readers about your background to date?
Paul, thanks for the opportunity to speak with you today and with the wider broking community. I started my insurance career in 2002 when I joined IPB Insurance in Dublin as Business Operations Manager. I came from the airline industry, where I’d worked with Aer Lingus in a variety of roles from front-line customer service and operations to commercial planning. When I left Aer Lingus I was Head of Business Planning, the core commercial planning unit responsible for route and network planning and developing the commercial business case for new aircraft acquisition. It was a great company to work for, with great people, camaraderie and opportunities for career development. Aer Lingus was also great at supporting learning, something which all the best companies do, and while there I studied by night in DCU for my degree in Business Studies – over four long but rewarding years.
The Business Degree in DCU proved to be my entry route into Insurance. One of the guys I studied with on the course, Pat O’Loughlin, later became General Manager of IPB and persuaded me to move from aviation to insurance – a move I’ve never regretted. I moved quickly into underwriting and experienced the post September ’11 hard insurance and reinsurance markets – a baptism of fire. It was a very challenging time when prices went up considerably, but one that IPB managed well through face to face meetings with brokers and clients. It was a great lesson which has stood to me – it’s important not to hide away in the office when you’ve difficult news to impart – get out there and meet people to explain the reasons why.
I became Head of Underwriting in IPB and subsequently Chief Operations Officer, with responsibility for Claims, HR and IT as well as Underwriting. I really enjoyed my time with IPB, and in particular the great people I worked with as we turned the business back to underwriting profit.
When Ken Norgrove came calling in 2014 for the Chief Underwriting Officer role in RSA, it was such a fantastic opportunity that it didn’t take me long to decide. RSA is a great company and brand, and one that brokers have always engaged with, so I was delighted to be part of the turnaround of the business. My role covers both Personal and Commercial Lines in the Republic, and our strong Commercial Lines business in Northern Ireland. I joined in January 2015 and the past three years have flown by, but I did find the time last year to return to education, and successfully completed the Certified Insurance Director course with the Insurance Institute.
RSA have restructured over the past three years, what changes can we expect following this restructure?
Most of our major changes have already taken place through 2015 and 2016, so from now on it should be more business as usual with a focus on growing our broker business.
We had a major restructuring program in 2015 where we right-sized the business and determined our strategic direction. We had to shed some business that was unprofitable and re-focus on where we saw our future being – a leaner and more agile business, focused on profitability over market share, and with an ambition of being best in class in the markets we serve. In doing this we had to engage extensively with the broker market – and unfortunately it was a pretty negative message at this time, with rate increases and targeted exits across some of our portfolios. We weren’t the only insurer doing this at the time, but the broker market has been extremely professional and supportive of us through this, and we appreciate that these messages were difficult to deliver to your customers. We in RSA appreciate hugely the support of all our brokers in sticking with us.
While all of this was happening and visible to brokers, internally we were also focusing on key initiatives which have been vital to our return to profit in 2017 – the setting up of our Galway Operations Centre and investing heavily in pricing sophistication. We now have more than 150 insurance professionals employed in Galway, across Claims, Commercial and Personal Lines Underwriting, and some Finance functions also. A lot of your readers will be used to dealing with our staff there, and the successful establishment of Galway has been vital to fixing our business.
The second key initiative has been our investment in pricing sophistication. We realised at the start that we had lost ground to competitors in this, and the Group backed us in investing to address this – which was a huge vote of confidence from our UK parent at the time. Our focus initially was in Personal Lines, both motor and then household, and we built a retail pricing and underwriting team and equipped them with the latest tools and technology. As we greatly enhanced our sophistication in Personal Lines pricing we then extended to Commercial Lines through 2017. We’ve made great strides in this overall and it’s been a key part of our return to profit. There’s always more to do, but we’re in a good place today, and now we’re looking at the next evolution of pricing into machine learning, data analytics, GBMs (gradient boosting machines) and new technology and tools. Also, we’ve led some of the pricing sophistication rollout across the Group, which is a huge testament to the calibre of our people.
Motor rates have been a cause of concern in the market in recent years… can you comment on this?
There has been much discussion on this subject over the last couple of years. In our view, the core issue of claims costs must be addressed as soon as possible. More than a year has passed since the Cost of Insurance Working Group report, and the cost of claims remains a challenge for Irish customers, brokers and insurers. It’s important that the Government follows through with legislation to provide a lower cost, sustainable claims environment for the benefit of all insurance customers. High claims awards and significant premiums go hand in hand, and in an environment where whiplash claims by comparison are a multiple of awards in the UK and other countries, this will continue to have a significant impact on premiums.
What do you see as the main challenges facing brokers and insurers in the current climate?
The regulatory agenda is currently packed with GDPR, IID etc. We were out of the blocks early with GDPR and took some great feedback from Brokers Ireland on behalf of their members on our revised delegated authority agreements – a great example of how working together gets the job done.
As an industry post the financial crisis we’ve made great progress on the prudential front in strengthening our balance sheets, and now we need to focus even more on the consumer agenda. It’s the right thing to do for all our customers, and