In three years Joe Plumeri has made Willis the world's third largest broker, but he is impatient to reach the top spot, he challenges the hard market view and accuses the industry of undervaluing its importance. Jason Woolfe reports

Whatever worries Joe Plumeri, it is not the gyrations of the market cycle that seems to drive the rest of the industry.

Disdainful of these apparently trivial forces, he says: 'The hard market is overblown.'

The chairman and chief executive of the world's third largest broker is a powerful man in insurance and it is in his interest to undermine the excesses of the market cycle.

When Willis was taken private in 1998 in a management buy-out led by US private equity firm Kohlberg Kravis Roberts, it was for $3 a share.

Plumeri, 59, joined in 2000 and immediately set about planning to float. When it happened the next year on the New York Stock Exchange, it was at $13.50 a share.

Last week the company's stock was trading at $33 a share: impressive growth by any standard. So Plumeri turns powerful arguments against any suggestion that the share price is the result of a market cycle.

'It's wrong to say we've done well because of the hard market,' he says.

'If it was the hard market that made us do well, everybody else should have done well, too. When you go from an 80% debt-to-capitalisation ratio and you get that down to 30%, that's got nothing to do with the hard market.'

He also attacks the practice of underpricing insurance and calls for a consistent and 'well-priced' market, but acknowledges that his power lies in publicising his concerns.

'I'm not a voice in the wilderness,' he says. 'When these voices come together and become a choir, after a while there'll be nice music and somebody will do something.'

And when can we expect to hear the dulcet tones of the massed ranks of the insurance choir ringing out around the world?

'We're showing up at the concert hall,' Plumeri says. 'We're taking our places on the stage.'

Integral part
His success piloting Willis - it earned him $1m last year, with a $2.8m bonus and his contract has been extended by another three years - suggests his call is worth heeding.

His opinions are coloured by his experience as a banker, who came to insurance as an outsider and saw the industry as failing to live up to its responsibilities and potential.

'My perception was that it didn't take responsibility that it should for an industry that is an integral part of commerce,' he says.

Citigroup, the bank where Plumeri spent the best part of 30 years rising to become head of 450 North American branches, owned US insurer Travelers and the future boss of Willis spent many hours in meetings listening to the ups and downs of the insurance industry.

Forming the impression that the business was 'out of sync', he came to the conclusion that the industry that protects its customers against adversity sometimes puts them through worse experiences than the adversities they are paying to avoid.

Plumeri sees insurance as the DNA of capitalism, the code that enables development of business.

'It's a big deal, a big responsibility,' he says. 'The issue isn't whether they want insurance or need it. The issue is how much they buy, under what circumstances and who they buy it from. We should thank God every day we're in a business like that.'

But this brings responsibility.

Back at Citibank, Plumeri reflects, there was never even a thought of lending money without telling the customer what the charge would be. But the equivalent still happens in insurance - policies are sold without the detail of the cover being agreed.

Reinvent insurance
Insurance needs to reinvent itself, he concludes, with a better appreciation of its importance, its responsibility and its capabilities given today's technologies.

Willis, along with world number two broker Marsh, signed up for the Lloyd's-backed Kinnect system, formerly known as Project Blue Mountain, to simplify data swapping.

The critical factor, the one that will decide the project's success or failure, is simply brokers' willingness to use it, he says. Half-heartedness will be the enemy of success.

Plumeri describes Kinnect as 'a great idea', but he's less categorical about the pace of market's modernisation. 'We've got [enough] people talking about the issue that I feel confident that we'll get there.

'Whether it's fast enough is a relative term,' he says.

He is less circumspect discussing Willis' connection with Burma, for which it was put on a blacklist earlier this month by the International Confederation of Free Trade Unions. (ICFTU). The organisation's name-and-shame action was part of a campaign to persuade companies to sever links with the country whose military leaders stand accused of human rights abuses including the use of slave labour.

Plumeri argues: 'It's silly to say we shouldn't be in Burma - I don't do business in Burma, I do business with our clients that do business in Burma.

'The fact of the matter is that we aren't in Burma. We don't have a branch in Burma.

'There are lots of countries around the world that we may not agree with, but we are not in the business of criticising what countries do.

'There's nothing we do that we don't check out with the Foreign Office to make sure that we aren't doing anything illegal or out of sync with government policy.'

So if the ICFTU doesn't keep him up at night, what does?

'Nothing strategic.

'The problem isn't the model, it's simply the execution - to do it better than everybody else is a constant challenge.'

What really keeps him up at night, if his disarming ambition is to be believed, is simply the fact that he doesn't - yet - rule the insurance broking world.

'I'm not as big as Marsh and Aon,' he admits, ruefully. 'Willis is the third largest insurance broker in the world. But frankly, being number three doesn't turn me on. When I was little, my father didn't bring me up to be number three. The whole idea is to unseat the people that are ahead of us.'

He has realised the first phase of his plan, by getting Willis to the position where it can challenge its bigger rivals.

The second phase is to become 'the greatest insurance broker in the world', aiming for more market share.

Just how much, exactly?

'100%', he answers immediately.

'My only answer is 100%.'

And he is dismissive of objections that such domination is not realistic. Market regulators at the very least would not allow a monopoly.

'I would like to have that problem.'