This might not be the best time in history to become chief executive of an insurer, but nobody told Adrian Brown. Five weeks into the job at RSA, he is brimming with ideas – even on the tricky issue of brokers and commission. Ellen Bennett met him.
Adrian Brown is not a worrier. The new chief executive of RSA keeps a list of up to 20 priorities in a little black book and delegates responsibility for them to his staff. “That list stops me from worrying,” he says. “Maybe I should get other people to do my worrying for me? Perhaps they wish I didn’t have 20 things on there?”
Five weeks into the job, Brown still seems an optimist. Energetic, chatty and down-to-earth, with a fine Bristol accent, he welcomes Insurance Times into his office, sparsely decorated with family pictures, on the sixth floor of RSA’s City headquarters. Despite the tremors in the economy, Brown is brimming with confidence that RSA can capitalise on market events, build on its relationships with brokers and lead the market back to profitability.
“The second week in, I thought I must be the luckiest new chief executive on record because it looked like there might be the chance for me to grow our top line by £200m overnight,” he grins, recalling when AIG teetered on the brink of collapse before being nationalised by the US government.
“At a time when lots of companies are having to look inward, we are able to look outward. Of course we’re affected by the economic conditions, but it’s business as usual for us, because of where we’ve got to over the years.”
Brown stepped into the top job from the role of chief operating officer following the sudden departure of Bridget McIntyre, who resigned to spend more time with her family, the company said. Was there more to it? “You need to talk to Bridget about that,” he smiles. (Bridget, if you’re reading, we’d love to).
Even when pressed, Brown remains coy on the details, but it doesn’t sound like the departure came as a great surprise. “I’d been having active discussions with Bridget about the potential roles that were open to me and that included discussing Bridget’s role with her. I knew there were two or three jobs within the group I would be in line for, so it wasn’t a surprise when Andy [Haste, group chief executive] asked me to do this job when Bridget decided to move on.”
RSA has certainly transformed itself over the past few years, cutting costs and streamlining the way it does business, and Brown reckons it’s payback time. Would he go after AIG’s business aggressively? A diplomatic response: “Well, that depends what you mean by aggressive. Aggressive would suggest price cutting to win business, and that’s absolutely not what we’re about. Do we have an active sales pipeline where we target business that we think we could write business profitably? Yes, absolutely.” These questions are characteristic of Brown and all delivered in his rapid-fire speech.
“AIG like any other insurer would absolutely be on that list of people we think we can target. We have a very active sales pipeline and quite sophisticated sales targeting.” But he adds that RSA would not denigrate AIG: “You won’t see us on the front pages, aggressively disrupting someone else’s client base – that’s not the way RSA does business.”
Could RSA be a victim of its own success? There has been intense media speculation recently that it is a prime takeover target. Brown, who has been with the business for 19 years, the past two as chief operating officer, laughs to demonstrate he has heard it all before.
Does the state of the economy make a takeover more likely? “I’m not going to comment on whether it’s more likely or less likely. I’ve been here for 19 years, and I doubt if there’s a year that’s gone by where RSA has not been talked about as a takeover target. The interesting thing is that six or seven years ago people were talking about us as a takeover target because we were a basketcase. Now they talk about it because of the turnaround we’ve done.”
He’s good at deflecting awkward questions and always does it with a smile. Brown’s easy demeanour backs up his claim to be a people person. “I love meeting people and being with people,” he says. “You won’t see me sat in this office very often on my own, and my wife will tell you, you won’t see me sat at home on my own very often either. I need to be with other people.”
“Six years ago people talked about us as a takeover target because we were a basketcase. Now it is because of the turnaround we have done.
Adrian Brown, RSA
For that reason, the networking and relationship building that is key to his new job is “a godsend”. Which is lucky because Brown has a long and laudable history in personal lines and direct sales – he headed up the formation of More Than in 2001 – but no record on commercial lines.
When told of his appointment, one broker mused, “Who is he?” Add to this that a number of key broker-facing alumni have left in the past couple of years – Simon Cooter to Brit in November 2006, Brendan McManus to Willis in August last year and Bernard Mageean to QBE in June this year – and that relationship building is looking vital.
Brown isn’t daunted. “During my first week in the job, I had called up our top brokers and arranged meetings. From day one, I’ve set my stall out – in this role, broker relationships are critically important. It’s the most important distribution channel for us – for our top line, for our bottom line – so it’s not surprising that that’s where I’m going to be spending a large amount of
But does he understand commercial lines? “You don’t work for 19 years for an insurance company and not understand the whole business,” he says. “I’ve been on the UK board for seven years, so I have spent a considerable amount of my time looking at and understanding our commercial business. And over the past two years as chief operating officer, a high proportion of my time has been spent sorting out service issues with claims and moving us up those performance tables. A lot of that has been focused on the commercial business.”
All the charm and energy in the world won’t keep Brown from some sticky conversations with brokers, given the current focus from all insurers on driving down the cost of distribution.
Brown’s peers have gone on record saying they are negotiating down on consolidators’ commissions. Will he do the same? No chance. Brown sticks to the RSA line of refusing to comment on commissions, but insisting they are part of a bigger picture.
“Commission is one element of the pie that makes up profitable returns,” he says. “I prefer to have discussions in the whole around the way you make an account profitable rather than around individual elements.”
It’s a talking point for RSA at the moment, because the insurer has just agreed to take a 30% share of the capacity for Fusion, Towergate’s underwriting agency, after some very tough negotiations that were played out in the press. Surely he must have got a good deal after all that? “You’re not going to get RSA coming out saying, ‘We’ve done Fusion and it’s on our terms and this is the deal that we’ve done’. That’s not the way we do business; we feel we’ve come up with a relationship with Fusion with some really tightly agreed objectives for us both to deliver on. If we deliver and they deliver we will make our returns, and we will monitor the hell out of that account.”
So if RSA’s not going to pay sky-high commissions, what does it have to offer to brokers? “Brokers want relationships which go from the top of an organisation right the way through. They want people on the front line to be empowered to make the right decisions, and they want us to deliver on service.”
It’s lucky Brown isn’t the anxious type, because he’s got a lot on his plate. It’s not all unbroken sleep though: “What keeps me awake at night are the ideas buzzing round in my head. If we did everything I had in my head, we’d all keel over and die.” IT