Broker vs. Underwriter - A view from the other side

Jun 17, 2016

This week we look at the industry through the lens of Fiona Davies, to get her thoughts on the challenges facing underwriters and how they can create more effective relationships with brokers and clients.   Fiona was previously a senior relationship broker at Willis and has been working as a consultant on a number of Gracechurch’s underwriter development projects. 

Q. Being a consultant on Gracechurch’s underwriter development projects, you’ve now worked closely with a number of underwriting teams; what are your observations? Has anything surprised you?

Overall, I am overwhelmed by the enthusiasm and willingness of all the teams to “do the right thing” by their clients and to improve. It’s this integrity that makes the London Market such a great place to work.

Because of the way the London Market has traditionally operated with brokers taking the risks to underwriters, many underwriters find business development a bit of a mystery. Yet, encouragingly, most can see that brokers’ shortlists are not getting any longer and that to grow they must address this.

The wealth of client and risk knowledge within teams is impressive. Conquering operational silos will be the challenge here, so that this expertise can be shared across teams, to help provide deeper understanding of the issues clients face.

Ultimately, the insurance business is all about claims, so it isn’t surprising that claims teams have great stories to tell of how they have helped clients with exceptional losses. Through this experience, these teams gain extremely valuable insight into the risks clients face.  To their credit, most underwriting teams can see the potential benefits this offers and want to develop ways to work more closely with their claims colleagues.  Although this aspect of the insurers’ offer will need to be worked out carefully.

 Q. Have you noticed consistent misconceptions amongst underwriters regarding how brokers and clients make decisions when choosing policies?

The most common misconception is that it is all about pricing. Yes, we are operating in one of the most competitive insurance markets and it’s no use pretending that it isn’t important, but in my experience it is not necessarily the most important factor for either the client or the broker. Many different issues will be at the forefront of both the clients’ and brokers’ minds. Gaining greater client insight and understanding what these issues are is critical to developing a solution that meets the client’s needs and ultimately winning their business!

The biggest and perhaps the most surprising mis-match is demonstrated when we use the Gracechurch external broker research and compare it with underwriters’ views on what they think brokers see as important; nearly every time the underwriters are out-of-step with the brokers viewpoint. Typically, underwriters focus on things like being available or being empowered which are hygiene factors as far as the brokers are concerned – everyone has to deliver this as a minimum. Differentiating factors like understanding clients’ needs, which brokers rate as highly important to winning business, are frequently undervalued. This highlights the opportunity available for underwriters who can align their services with the brokers’ priorities.

Q. What, in your opinion, is the single biggest challenge for underwriters in developing business in the London market? 

The biggest challenge by far in such a competitive market is to differentiate. It is critical to success, as competing on price will ultimately lead to failure. Without the time to stand away from the coal face, many highly experienced underwriters find it the most difficult of challenges to address.  To stand out from the crowd, underwriters need to put themselves in their brokers’ and clients’ shoes and consider what they want and need and how their solution may best support them. 

Brokers want underwriters who can help them develop solutions for their clients, people who have researched the client, ask probing questions, are flexible in their thinking and ultimately understand the clients’ needs. Easily said, but this will all need to be embedded in new ways of acting, thinking and underwriting in order to demonstrate that underwriting team’s difference.

It’s essential to build a great reputation. Clients and brokers are well informed as well as demanding, they know who is good and want the best. This can only be done by differentiating oneself and engaging with clients and brokers in a manner that builds a deeper understanding and in the process a deeper relationship.

The underwriter that becomes the best at probing clients and brokers to develop this level of understanding of their needs and develops solutions to respond to them will be the one that wins the most business!

Q. Tell us a little bit about yourself and your background in the London Market.

I started working as a broker in the City in the 1980’s, and immediately found the buzz of the London Market compelling. The concentration of so much experience in such a small area, offered many interesting and varied opportunities to work with teams including brokers, underwriters, actuaries, risk specialists. All had different skills to offer, but all had the same goal – to develop solutions to the risks faced by clients.

As a Global Client Advocate at Willis I was responsible for the overall Willis relationship with some fascinating clients, my MBA dissertation was focused on Client Relationship Management, and in recent years I set up a UK Manufacturing Practice at Willis, designed to make sure the specific needs of clients in that sector were met.

I took the opportunity to leave Willis at the end of 2014 wanting to use my experience in the voluntary and consulting sectors.

 

Fiona Davies – Senior Consultant

With over 30 years’ experience in the insurance broking industry, Fiona has a thorough knowledge of the sector. While in her early career she was a Lloyd’s broker, she turned to focus on new business development and client relationship management, combining this with team leadership. As a consequence, her expertise lies in the following areas:

Client relationship management and service model development

  • Sales and marketing planning and sales process management
  • Team building, motivation, development and coaching

Understanding client needs, and making sure those needs are recognised and responded to, are a common theme in her career. Even the subject of her MBA dissertation was focused on Client Relationship Management.