Earlier this year, Paul Donaldson, stood in front of a group of brokers and declared: “I will make you rich.” The crowd, at a dinner hosted by the insurance company, cheered.
Donaldson, the incoming managing director of the broker division at Royal & SunAlliance (R&SA), clearly knew how to grab the attention of the broker market.
Now, three months into the role, Donaldson says, in his first interview, that this comment was more than just an attention-grabbing aside.
“There are three things that brokers want an insurer to do for them,” he says.
“They want the insurer to make them look good in front of clients, they want the insurer to be easy to do business with and they want the insurer to make them rich.”
These, he says, are at the heart of his strategy, particularly ease of trading which he refers to time and time again (“It’s all about trading”) during the discussion with Insurance Times.
“We want to see things through the brokers’ eyes, and the strategy will have that in mind,” he says. “The market will see this as our strategy develops over the next six months.”
Donaldson took over his role in July, parachuted in from R&SA Ireland, after the sudden departure of Brendan McManus to Willis.
He was chief executive of the Ireland operation for the past nine years and prior to that was part of the management team of the insurer’s operations in Scotland and Northern Ireland.
Donaldson lives in London during the week in a flat on the south bank of the Thames which, by coincidence, is a stone’s throw from a flat owned by McManus. At weekends he flies back to Ireland to see his family.
Not surprisingly, Donaldson refuses to be drawn on comparisons with McManus and his particular style of dealing with the broker market. “Brendan did a good job and did a lot for Royal & SunAlliance. He left a good legacy,” is all he will say.
How does Donaldson, who has been with R&SA for over 30 years, describe his style? Listening features highly. “I have two ears and a mouth – I like to listen in those proportions,” he says, adding: “I am execution orientated, I like to listen to the issues and am broker focused.”
“Insurers buying brokersI am looking at it trying to understand what it all means. It is not something I would do. I donâ€™t know how to run a broker; Iâ€™d stick to being an insurer and get better marginsInsurers acquiring stakes in brokersThere is nothing wrong with insurers protecting their interests. We are not ruling it out
R&SAâ€™s property focus If R&SA was a person and you cut its heart open it would say â€˜propertyâ€™. It has been our strength for years; we have a deep expertiseUnderwriting disciplineAnyone who takes a boom and bust mentality [to pricing] has no future at R&SA
The challenge, he says, is to make the whole of the organisation broker focused.
So what are the brokers asking for? Access to decision-makers, says Donaldson. “Brokers don’t want time wasters. They are in a challenging market and they want straight-through processing.”
He says R&SA is putting more decision-makers in front of brokers. In the coming weeks, it will be opening more ‘market sites’ across the country following the success of its site in Leeds.
The market sites, giving brokers face-to-face access to underwriters, will be in Glasgow, Birmingham, Manchester, Croydon, Bristol and Liverpool.
Donaldson has also pushed forward R&SA’s initiative for smaller brokers which transact business less frequently with the company. Broker F1rst gives these brokers access to a dedicated account manager.
It is still early days for Donaldson. Despite formally taking up the position on
1 July, he has spent only about seven weeks doing the job due to holiday and time spent working in R&SA’s international business.
His strategy, he says, is still evolving and there will be further changes in the coming months.
“I am challenging everything in our distribution strategy. I am talking to networks and brokers to establish what they need.”
Donaldson insists he will support brokers of all sizes and is not looking to cut R&SA’s agency base. He is also dismissive of insurers’ broker clubs which give preferred brokers special deals, for example, on commissions and service.
“I don’t like clubs; I don’t like labelling [a broker]. I’d rather look at the value of that broker regardless of size. I support professional brokers. I want more dialogue with brokers to find solutions that help [them].”
“Anyone who takes a boom and bust mentality [to pricing] has no future at R&SA.”
R&SA in numbers
Royal & SunAlliance reported UK underwriting profits of Â£51m for the first half of 2007, down 45% on the same period last year.
The UK combined ratio deteriorated to 96.1% from 91.5% in the same period in 2006. This was due to flood losses.
Net written premiums were up 7% to Â£1.4bn, driven by growth from affinity partnerships and specialist commercial lines.