Our panel discusses travel opportunities and reviews the highlights of 2005
Young Professionals' Editorial Advisory Board
Chair Elliot Lane
Ben Buckton, Allianz Cornhill
Martin Davidson, Willis
Julian Edwards, MCE
David Curry, Miller
Richard Hawkes, Groupama
David Partington, Marsh
Chair: I am very pleased to announce that the CII has asked the Young Professionals' Advisory Board members to become the main focus group of its new talent taskforce next year. It is a great opportunity for the board and we look forward to discussing the issues of talent and succession planning over the coming months.
Today we will be discussing two topics. First we will discuss the efforts global insurers and brokers have made to offer an opportunity to travel the world. And the second question is to take a retrospective view of the industry during 2005. From a Willis perspective, Martin Davidson, are global insurers trying to encourage you to become more internationally thinking?
Martin Davidson: They certainly do encourage the international perspective to an extent. I raised this issue slightly from a selfish perspective, because I work largely with international businesses and I have global clients.
Willis encourages the international element of the business, as it is a global company. It particularly encourages the teams of people who are working on international accounts. It promotes international issues and understands what is happening around the world in different countries.
In terms of offering opportunities for people who want to develop their career that way, in the past I would say it certainly has happened. There are certainly people within Willis who came from the UK - actually from the division I work in currently, and they're doing very well in the company, particularly in Asia, Australia, Latin and South America, where people have gone on and are now managing directors of Willis Asia and Willis China. So people have done very well.
I'm interested in how it works in other internationally-based companies. I went on to the PricewaterhouseCoopers' website last night and it said that it has 2,300 staff, which is 2% of their workforce, who are involved in overseas projects or work in over 70 countries. I wonder how many insurance companies could say that 2%, even 1% of their staff, are involved in secondments overseas.
Chair: Is it one of the reasons you were attracted to the job, because you felt that there were international opportunities?
Davidson: Yes, especially because I moved over to London from Belfast, where companies are interested in travel, but moving across to London I was working on global accounts. I had an image of jet-setting around the world every week. That hasn't happened.
There's been an element of travel, but it has to be justified. I don't say there's anything wrong with that, it's not just about having a cushy lifestyle, about deciding you want to go to Australia for a week. But I definitely think that, in insurance, people find that there's nothing like dealing with people face to face for understanding where they're coming from. There's only so much you can do by email or by teleconferences.
Chair: David Partington, does Marsh offer secondments and opportunities to work abroad?
David Partington: Yes it does. There have been a couple of high profile moves from people in the UK to overseas operations in the past 12 months. There are also the opportunities for secondment and very much the same issues in terms of client-related travel and project-related travel. It is done on the basis that you do it if you need to do it. It's encouraged as long as there's a justifiable reason.
Our senior management have certainly mentioned on several occasions over the last 12 months that they're keen for that to progress even further. I agree that I think the opportunities are there if you go looking for them at the moment, and there's a real desire within the company to make that more process-driven where the opportunities are promoted more clearly. In this way there are more people working not just across international boundaries, but also across boundaries within the organisation in the UK.
Chair: Is that one of the reasons you joined Marsh, was because it was a global company and that you had opportunities?
Partington: It was a factor, but I was more attracted to the opportunity to work with large clients and at the cutting edge of the insurance market, as opposed to anything specifically international.
Chair: There seems to be a lot of movement in Allianz Cornhill. Even the PR and marketing team get to travel.
Ben Buckton: It is obviously a global company, therefore there are global opportunities. The company is supportive of people who want to go and take up the opportunities.
Recently people have gone to Australia and Singapore, and there have been secondments to Munich and to our head office. We also have a sustainability project, where we've been looking at competencies within the group. This is giving people the opportunity to go on secondments to Canada and Brazil.
The Allianz group intranet does have an international jobs market page where you can search for opportunities. You can also contact the head office and go through those different channels. But the opportunities are there. However, you need to seek them out yourself - they don't come knocking on the door.
David Curry: Well at Miller we are not a national broker. In the division I work in it's more a case of us having international clients, and so it's short term - two-week trips to meet the clients. We've had people go to Australia, the US, France and Japan. In the unit where
I work there are not many permanent placements.
There are a few that happen in the head office, because Miller is a part of broker networks - one in America, one in Europe - so there will be opportunities to perhaps go into joint venture operations.
From chatting to US brokers, they operate, in my opinion, differently to the way we operate here. Also dealing with, say, Japanese businesses, was a bit of an eye-opener for me. Generally, Japanese companies want their businesses insured with Japanese insurance companies. It's just their way of doing things. Irish businesses I found not too far away, but again they are more akin to US companies in terms of litigation. It's just the way they operate over there, slightly different.
Chair: Groupama UK has a French parent. So, Richard Hawkes, do you go over to France?
Richard Hawkes: Groupama has quite a few overseas subsidiaries stretching mainly throughout Europe, but also as far as Vietnam and China. We don't have, I would say, a structured programme for developing people to travel overseas. But there's nothing really to stop anybody working for one of the Groupama overseas subsidiaries.
What we do have, however, is that over the past 12 months we've encouraged people from our French parent to come to work in the UK at the Minories office.
So we've had a couple of quite bright French interns in their early 20s, studying in France, who have used a six-month window in their study time to work in our head office. They will work in a range of areas to gain experience and no doubt improve their language.
Chair: Do you think another language is useful?
Hawkes: In the area that I work, no, not really - unless someone approaches us. An intermediary approached us a few years ago and said: "Oh can we do something with your French guys overseas?" It's just a completely different marketplace and, believe it or not, it raises more questions than it answers.
So I'm not saying we don't talk to each
other necessarily, but each division is pretty autonomous.
Davidson: That was one of the issues I raised, how many companies offer language training? I don't think Willis does, but it's just in terms of promoting the international awareness and giving people the skills that might enable them to go and work more internationally.
Hawkes: I know a number of our executives, and my manager, for example, have French lessons on a regular basis, so I guess it does help ultimately if we are speaking to our French parent.
Davidson: Exactly. In the Willis international network we expect all of our network brokers to speak English, which is fair enough. But I also think that if people go to work in, say, Latin America, then why not offer Spanish courses? Whether it's in-house or whether you just fund external training, it will give them the skills that will enable them to work in those countries.
Chair: There is always the argument that the business language of the world is English.
Davidson: Exactly, and that will probably continue. But if people want to work in, say, Latin America, then they will need to speak the local language if they want to get on.
Buckton: Is that up to the individuals then to seek out language training themselves?
Davidson: I think it can be, but at the end of the day I don't see why if the company is particularly internationally-based or if it wants to focus on a certain territory, why they shouldn't support it.
Companies support all sorts of training,
in-house and external, so why not language-based training? And another issue they're thinking of in terms of graduate trainees to do a two-year apprenticeship. A solicitor's firm will often offer a six-month course in one of its overseas offices.
I certainly don't think that forms part of the Willis graduate programme, and I wonder how many other companies place that as a standard offer to staff.
Partington: That's a strong point for Marsh. All the graduates have an opportunity to do a secondment overseas. Equally, from a training and development programme, more and more of our courses are done on a pan-European basis, so the accelerated leadership programme is now a European programme and includes colleagues I think from 18 countries.
All of our main management training courses are now done on a European basis and location rotates around Europe, so that there is, as a minimum, a much much greater understanding of different cultural issues that people face in their business lives. And also a forming of a network of people around Europe, which I think helps when it comes to actual day-to-day business activity.
Chair: The cultural differences are going to be the strongest - threatening future business - if there is a shift in the axis of China and India, as they become the more dominant players. The western hemisphere - the US, UK and Europeans - may end up finding themselves in a much weaker position.
Are any of your companies actually thinking about this, and do they have a long-term strategy and are aware that there might be a cultural shift at all?
Partington: We had a good recent example of an understanding of that situation, where our UK sales manager has just moved over to run sales in Asia. That's a good example of an excellent opportunity for that person, but also recognition that some of the skills that we've developed in the UK and the western world are transferable to Asia.
They're keen to embrace those experiences and those capabilities and actually learn from those and develop them into their own cultures.
Chair: What does the group feel about the amount of outsourcing that's taking place across the world?
Hawkes: You mean call centres in India?
Chair: Yes, but not just call centres. What about the companies that actually outsource lots of other services, like policy documentation?
Davidson: That's definitely an issue within Willis, because, as you say, it's not just call centres. It's accounting functions, administration and, more recently, policy-checking is now done in India. On a day-to-day basis it's not really that much of an issue, certainly from where I'm coming from.
If people over there are properly trained and qualified to do that job, then great. Sometimes there's a bit of a communication lag. They understand some of the issues that are involved, they may theoretically know some of the issues, but in terms of how things practically work, it can be a challenge. But it's definitely something which isn't going to decrease, it's only going to increase. It is an increased risk to UK-based insurance jobs. Back office jobs in particular will continue to move across to India.
And, as I say, China is another good example, because that's something that Willis sees as a developing market. Willis recently increased its ownership of a broker in China, Willis Pudong, so it's a market we're very much going to push.
Julian Edwards: I like the point that David made earlier on. Now, the UK personal lines market is dominated by brokers who are
UK-based and their distribution channels tend to be insurers or divisions of insurers which are based in the UK, particularly the traditional Lloyd's motor market. Perhaps some are registered in Gibraltar, but the opportunities are limited.
They are based on the dynamics of Gibraltar, but many of the functions are still retained in the UK. But looking more at the composites who have partner brokers, direct arms on the continent, it would be very interesting to be able to have a network set up where there are job-swap opportunities. Where brokers at senior management level can understand the pressures, the way that other brokers are treated and other countries are dealing with regulations.
Chair: 2005 has been quite a year. FSA regulation, hurricanes, new post-Spitzer business models and transparency. Let's just go round the table and find out what were some of the biggest topics.
Hawkes: First and foremost, I would say difficult market trading conditions have been a factor for the past 12 months. Regulation such as treating customers fairly (TCF) is now kicking in, and the industry still needs to have adequate processes in place and ensure we're adhering to FSA regulations and TCF. It's now gone right through the chain.
Curry: The FSA has dominated the year. I attended a demands and needs workshop about a week ago and it's quite clear that there is still confusion and debate over when and where you're supposed to be saying certain things. There is a little lack of clarity in some places in FSA regulation.
I've been competing against brokers where it's clear that possibly they are not adopting the same guidelines. This makes competing against them extremely difficult when you are adopting those guidelines.
This is because the difference is you're giving a client a report that is an inch thick before you even get to the meeting, and you'll be up against a broker who just puts everything on one fax. And I know which one the client's going to want to read.
Natural catastrophes seem to have been on the increase this year. Rather worryingly, [CII director general] Sandy Scott said at our last session that possibly we're one natural catastrophe away from a collapse. On a personal level it's the year I became an ACII.
Buckton: For me, it's been about managing the cycle in a difficult trading year and making sure we write for profit. Outside of that, obviously the major issues have been climate change, TCF and contract certainty. They seem to be the big issues as we head towards the end of the year.
Partington: Obviously 14 January 2005 was a big event and we'll probably look back on that as a really good event for the industry in time to come. And I think the markets need to react to New York attorney general Eliot Spitzer's allegations. And the momentum that has been created around transparency has been a huge factor for us, taking up a lot of time for a lot of the major broking houses this year.
Davidson: The year started with quite a bit of uncertainty for the major brokers, what with Spitzer and FSA regulation around the same time. But I think that Willis has emerged very well from that. We've tried to move on from Spitzer.
Transparency has obviously been a very big issue this year, but that's been a really positive thing, because it has encouraged brokers to focus even more on the actual value they're providing the client with and the services they are doing to provide that value.
In terms of FSA regulation, Willis was in advance of it coming into effect. We have a system called WEM, which is the Willis Excellence Model.
This is a compliance management process that has been in place since 2002, and was created originally as a precursor to contract certainty, post-World Trade Center claims.
It encouraged Willis to put forward these processes that would make clear the details of placement in terms of making sure that there wasn't anything ambiguous about the placement.
Edwards: The onslaught of the requirement of the motor insurance database (MID) has been one of the most effective factors for the personalised motor market this year. It's a hugely beneficial dimension to our businesses. It's very important to combat uninsured drivers - not speaking from an insurer's point of view, but for straightforward motor business.
It's quite an easy process to get right. For the broker market it's all about software houses. But for the non-standard motor market, it has been a different story. You have had to be able to make your systems flexible.
For example, there are certain portfolios where in up to 90% of businesses, the vehicles don't have ABI codes. If you don't have ABI codes it's very difficult to use electronic data interchange (EDI) for these products. If you can't EDI a product, you're very likely to step outside of the requirements of the MID, increasingly so as the days reduce and continue to reduce.
So people have had to be able, if they want to continue to write non-standard motor insurance, to invest in their systems, and also to select insurers with systems that are flexible enough to handle non-ABI grouped vehicles. IT