Katy Dowell meets Allianz Cornhill chief executive, Andrew Torrance, and discovers what makes the man tick
When Allianz announced job cuts across the group earlier this year, the UK's subsidiary,
Allianz Cornhill, escaped unscathed. So meeting the chief executive of one of the country's leading insurers, Allianz Cornhill, I expected to be inspired by a great figure who is battling against the tide of negative change while embracing a moving market. But while Andrew Torrance may be a safe pair of hands and a measured man, he lacks an inspirational quality.
Torrance also appeared to be unknown to staff further down the hierarchy, several of which asked me about his personality because they have never met him. Yet the higher management teams are kept close to the fold. It is these people: John Dye, head of claims, Chris Hanks, general manager for the commercial division, and Nick Hall, head of personal lines, who are entrusted to keep Torrance in the loop.
Despite the impression of distance existing between Torrance and his staff, he told me that staff retention is essential in a market where insurers are poaching teams from each other.
Torrance sat in his glass-walled office and reeled off a list of what Allianz is doing to keep staff rooted to their seats. "We have the right employee development, an underwriting academy, relationship development schemes - all have a huge impact on growing our staff capabilities and making the opportunities to use personal development plans. We really look at the way an organisation is led and put a lot of investment into building relationship capabilities."
Furthermore, he says: "We also have a competitive benefits package with flexible benefits for the entire workforce, which offers a range of things, such as an ability to buy nursery vouchers for people with children."
For a man who is not that well known among his own staff he certainly seems to think he knows what they want. And, those staff asking about their boss - as if he is an enigma to uncover - are happy in their jobs. Allianz Cornhill, they said, is a good place to work.
But I can't but feel this has more to do with the hands-on management team who are in touch daily with the workforce. Alternatively, Torrance is in touch with the global force of the insurer helping to keep job cuts off the agenda and put profitable growth back on it.
But in the first quarter of 2006, Allianz Cornhill's personal lines slipped into the red. The combined ratio hit 103.6% - a figure that has steadily been creeping upwards for two years from a starting point of 95.9%. But the insurer is not alone here. Norwich Union's private motor book made a £33m loss in the first half of 2006, while its combined ratio stood at 96%.
In the second quarter Allianz Cornhill was also hit by tough market conditions with pre-tax profits falling by £9.6m. Profit before tax fell by 9% to £101.4m in the six-month period, from £111m in 2005. In personal lines, however, the combined ratio improved from the first quarter to 98.5% - still lower than last year's 97.6%.
Battle for first place
There is a big business issue in terms of Allianz Cornhill serving the broker after
Royal & SunAlliance (R&SA) announced its intention to become the number one insurer choice for brokers. Allianz Cornhill needs to keep up. Torrance admits a fondness for business networking, and says he would
"like to get out more to meet more brokers". He knows it is customer services and product range that will keep brokers on side.
Forcing them, for example, to take on i-market might risk a backlash, so Torrance keeps to his typically uncontroversial line:
"I think the end-to-end processes where SME is written is grossly inefficient. Automating process so you can electronically conduct business has some great potential for the economy.
"It will take out the errors and eliminate re-keying. Equally, it is something the industry will have to deliver. It is easy for us to sit around a table and talk about it but there is still a fair amount of work to be done."
Will it work? "Five years down the road it will be an electronic industry."
And Allianz remains committed to the UK market. "The UK market is important to Allianz because it's a very sophisticated marketplace, has a thriving business industry and gives insight into what is happening globally and what kind of impact it might have," he says. Added to this the UK holds one of the largest property and casualty markets in the world, which, in turn, says Torrance, provides a breeding heaven for innovation. The UK, then, is unbolting the door to the worldwide market.
What's in a name?
It is a worldwide market that Allianz Cornhill feels the need to re-brand to fit in with.
From 2007 Allianz Cornhill Insurance will be Allianz Insurance. The global workforce will be working under a sustainability regime, being rolled out now to introduce a standard of best practice across the group. At Zurich they call it snappily the Zurich Way. Implementing best practice standards will, undoubtedly, impact on service standards.
"This is about making our organisation more effective, not about reductions to cut costs," says Torrance. "It will bring major benefits to our brokers."
The insurer is also making efforts to broaden its distribution arm by acquiring its own brokers. The acquisition of high net worth specialist broker Home & Legacy, and SME specialist Premierline will allow the broker to push further into focused lines that it expects to generate profitable volumes. Although these will remain independent subsidiaries of Allianz Cornhill, the brokers will be able to take advantage of the 'best practice' process that has been instilled into the insurers' culture.
Torrance says: "We can improve how we underwrite, make more effective our claims management, drive down litigation costs, and improving the claims supply chain."
It appears Torrance's objectives are clear.
It is what any chief executive wants from his company - and what his boss wants from him - "sustainable growth and profitable underwriting".
Man of mystery
Does it matter that, although they work in the same building, Allianz Cornhill staff have not met their chief executive? Probably not. Instead it matters they know his objectives and which way the insurer is focusing. It also matters that they know they have job security, that they will be encouraged to be innovative and that their ideas will be considered.
Torrance knows the intricacies of Allianz Cornhill. No doubt he knows the pitfalls and is steering the staff away from them. "Insurance is a fascinating business," he says. "No two days are ever the same. Fortunately, it is also a great place to work."
And it is this ethos which keeps Torrance and his 2,000 plus staff in their jobs. IT