Game Changers in the Insurance Industry
This RIMS 2015 panel gathered senior industry executives from brokerage firms to discuss what they believe are the real game changers in the insurance marketplace.
- David Batchelor, President, International Division, Marsh LLC
- Steve McGill, Group President, Aon PLC
- J. Patrick Gallagher, Chairman, President & CEO, Arthur J. Gallagher & Co.
- Dominic Casserley, Chief Executive Officer, Willis Group
- Roger Andrews, Director, Risk Management, E.D. Bullard Company
What keeps you up at night?
- The technology revolution. How do we capitalize on this speed and richness of data in our own businesses?
- Making sure that our client services remain at the highest level.
- The ongoing need and challenge of managing data.
- Attracting graduates into our industry.
- The lack of disruptive innovation. This is an industry born on tradition and it is resistant to change. We need to be equipped with the right technology and workforce to keep up with changing times.
How is the industry responding to help risk managers with their cyber risks?
- This is the risk of the decade. The insurance market has been used to delivering products, not solutions. This is an area where we have to deliver solutions.
- The first thing we should all accept is that this is an evolving risk, which makes it extremely difficult, and no one really knows where it is going. It’s about managing this evolving risk, not just insuring the risk.
- It’s not IF you are going to get hacked, it’s WHEN are you going to get hacked. This should be the number one issue on risk managers’ lists.
What do you see as the largest emerging risk coming up?
- Regulatory issues. Being on top of what’s going on with compliance and regulations is very important.
- Geopolitical risks. Instability in other countries is causing economic impacts. If you operate in these areas, you must be aware and strategic.
- The liability insurance landscape.
This is a cyclical industry. What do you feel it would take for the market to change?
- I think that the difference between the previous cycles and today is that: 1) there is much better data, 2) there is much better transparency, 3) there is resolve at the CEO level that their company must have returns and are pricing accordingly.
- The market is able to absorb catastrophic losses without as much of an impact. There is more capacity and strength in the industry.
- It’s a great time to be a risk manager. The value proposition in the reinsurance marketplace for insurance companies has never been stronger.
How does your firm manage and think about client profitability?
- We do a lot of time tracking to understand the value we provide to them and the revenue we are generating so that we can be as transparent as we can possibly be.
- The transparency creates an open discussion as to what clients are looking for and how we’re able to charge for that and deliver.
- We are very willing to be as open as possible to come to an agreement as to what is a fair remuneration.
What can brokers do to help clients transition from local business to national?
- Educate yourself to become an insider in each market to show a picture of the risk landscape.
- When expanding globally, clients must find what markets align with their own company strategy and where they fit.
- It is important to have a local practice wherever practical around the world to support clients and know how to navigate through your own network to help your client solve any issue around the world.
What is the impact of big data?
- It’s an integral part of the future. The amount of data created in the past two years, alone, is greater than the total amount of data we have collected since the beginning of insurance.
- It is not how much data we collect, it is what are we going to do with that data to innovate.
- We need to use this data to create predictive modeling that helps our clients make risk management decisions. This is critical.
- The real value that a brokering firm brings is the data, how they collect it and interpret it to help you navigate the landscape.