Time for strong leadership as insurance sector transforms

Amanda Blanc was recently appointed CEO for Europe, Middle East and Africa (EMEA) at Zurich Insurance Group. She is also chair of the Association of British Insurers (ABI). Commercial Risk Europe Editor Adrian Ladbury interviewed Ms Blanc about her career, as well as the many challenges and opportunities facing the insurance sector and its customers. Adrian Ladbury [AL]: How and why did you get into insurance in the first place? Are you one of those rare people that always wanted to enter the insurance sector while at school? Amanda Blanc [AB]: No, it was not planned like that. I graduated with a Bachelor’s Degree in history, with honours, from the University of Liverpool in 1989 and applied for a variety of roles. I was offered two jobs. One was with Mid Glamorgan County Council in Wales and the other was as a graduate trainee at Commercial Union (CU). I opted for the job at CU and it was an excellent choice. It was a fabulous training programme that has produced many leaders of UK insurance operations over the years. It was also a good choice because, had I taken the job at the council, I probably would never have left Wales. I have really enjoyed the opportunity to work in such a diverse and international business over the years. [AL]: How and why did you decide to join Zurich as CEO for EMEA last October. What are your main objectives? [AB]: I joined Zurich from AXA, where I was CEO of AXA UK and Ireland. I felt the time was right to take on a bigger challenge with a more diverse business base. At AXA I was in charge of commercial lines, health and retail in the UK and Ireland, but now I have a wider geographic spectrum plus the life business. So, this was an exciting opportunity. The role covers a spectrum of 17 countries and also includes joint ventures with a number of banks such as Santander in Latin America and Spanish banking group Banco Sabadell. This is a great business and a real USP for Zurich, enabling the group to offer these products on a capital-light basis. [AL]: What about the commercial lines business, are things finally hardening after a long and tough period for Zurich and the rest of the market? What is your strategy? [AB]: These are clearly challenging times for everyone in this market. But I would argue that Zurich is in a good position. We have a long experience in the larger commercial and corporate space and have a strong leadership position. We write some 7,500 global programmes and are able to place business in 210 countries worldwide. This is a proper platform and part of our corporate DNA. I recently attended a corporate advisory board held at the FIFA museum in Zurich, with a group of risk managers talking about their experiences with the company. The feedback was very good, but this is clearly a challenging time with excess capacity, volatile results, big claims and catastrophic events, and of course still low investment returns. The continued rise of insurance-linked securities business also helps to make for an interesting mix. Then you have other major factors such as digitalisation, the changing nature and expectations of the workforce, and global economic trends. Across EMEA, growth prospects are not all the same. There is growth in Spain, not so much in Germany. Italy is challenged, but Switzerland is good and Ireland is exceptionally good. These are all different dynamics that make it difficult to generalise. But we do have a set of core basic principles upon which our strategy is based regardless of the dynamics. These are: customer-centricity, simplification, and innovation. [AL]: What do you mean by customer-centricity? [AB]: This is really, really important. It has to come right from the top, from the executive committee, and it does at Zurich. All our executive committee members do close-the-loop calls with customers when problems arise. This is done systematically. All executive committee members take the opportunity to talk to customers and find out what went wrong and what went right. So, it is a fundamental part of what we do. There are more and more touchpoints and this helps us make sure that we are really listening to and responding to our customers. [AL]: Simplification is another very important word that can be lost in translation. Risk managers tell us regularly how frustrated they can become with leading insurers because of complexity and bureaucratic structures. What are you doing in this critical area? [AB]: We have been through a major restructure as you know. This was announced in June 2016, when it was revealed that the business would move to a simpler, more customer-oriented structure, reducing complexity, creating greater accountability and empowering teams to deliver products and services in a differentiated way. As Mario Greco, group CEO, explained at the time, this was a response to the changing dynamics of the insurance industry. The new structure was designed to promote innovative thinking and meet the demanding expectations of customers, employees, shareholders and the broader societies in which Zurich operates. I think this decentralisation and local empowerment, combined with simplification at the centre, has made a huge difference. It is an ongoing process and will take time as it continues to be baked. But we are certainly on the right track. [AL]: What about innovation? How is Zurich investing in insurtech to maximise the opportunities offered by the digital economy and benefit customers? [AB]: We are working hard in this area too. There is a lot of activity aimed at using the latest technology to improve the experience for the customer and our own processes. A lot of this is about how you partner with insurtech firms to improve the organisation overall and then translate that into the local experience within a territory. We are taking this seriously. At the start of this year, we announced that Chisel AI was the gold winner in the first Zurich Innovation World Championship. It has developed a natural language, artificial intelligence (AI) processing tool that the company claims allows commercial insurers and brokers to extract, identify and classify unstructured data sources, such as insurance documents, 400 times faster and much more accurately than a human. The championship attracted more than 450 startups from around the globe. Zesty.ai, which has developed an AI-based solution that can provide insurers and other users with detailed and accurate property evaluations to improve underwriting, pricing and post-event response, was the silver winner. Each winner now has the opportunity to develop pilot programmes to make their products and services available to Zurich’s customers in selected countries and regions. This competition underlines our ongoing drive to attract and retain the best and most innovative talent across the globe, and drive transformation and innovation in the insurance industry. [AL]: We are continuing to see a process of consolidation in the international insurance, reinsurance and broking market. Risk managers are worried about the impact on choice and competition, and whether this is really only for shareholder value, not the customers. Is all this consolidation good for customers in your view? [AB]: We are seeing this consolidation everywhere and you are right, the big question is: Do the benefits flow through to the customer? You may hear a different answer from the customers that you talk to because they don’t always see a better product or price. Should they be worried about choice? Yes. The consolidation at the top end – the larger corporate segment – has been significant and this may be an understandable concern. But, at the same time, it does create opportunities for others because not everyone wants to deal with the biggest players, they do not want to be last in line. This is particularly relevant in the commercial and corporate broking sector in my view. Surely this consolidation gives other independent brokers the chance to impress? So, it can be negative and positive. Brokers are remarkably resilient and they will adapt. [AL]: Claims is another very important area currently for risk managers. What could, and should, insurers such as Zurich be doing to improve performance in this area? [AB]: Claims is one key area where technology can really make a practical difference. This is a key touchpoint whether in life, retail or commercial lines. How we perform at this point is critical. The fact is that 90% of customers have never had a claim, so we need more positive touchpoints. The bottom line is that the customer needs to be up and running straight away. This is where you need transparency, and the application of digitalisation has a great opportunity to transform the process. The same applies in complex commercial claims, such as through the use of drones to investigate losses. As I mentioned earlier, there is some fantastic work going on in this area, as shown by the winners of our recent Innovation World Championships. [AL]: Another really important area of innovation that we see is with corporate employee benefits, an area in which many risk managers are becoming increasingly involved. What is Zurich doing to help come up with solutions for the rapidly changing nature of work, employee health and wellness? [AB]: Health and how insurers can help employers and employees manage this complex area, particularly in prevention, is a critical area. Caring for the elderly, partners and children, and identifying and managing mental health problems, has become a really important area for companies and insurers. We recognise the importance of this area. In November of last year, Zurich launched a major three-year research programme, Agile Protection, in partnership with the Smith School of Enterprise and the Environment at the University of Oxford. The study looks at the potential for the development of frameworks involving different stakeholders, so more workers are provided with flexible protection and financial support in an increasingly fragmented labour market. The programme launched with a statement report, which stresses that current support systems for people at work need to be rethought in the context of a 21st century landscape of work and retirement. People starting work today will typically switch employers several times throughout their careers. There is increasing use of different types of employment contracts, such as gig workers in the sharing economy. Increased longevity is also extending working lives and creating a growing need for career breaks for responsibilities like caring. This means that many people lack any kind of financial safety net to support them now and as they approach retirement, not to mention rising debt and stretched welfare budgets. New models need to be developed and insurers have an important contribution to make here. [AL]: Another important area for the risk and insurance sector is diversity and gender, as highlighted by the fact that you still see relatively few women in leadership positions in this business. Perhaps speaking in your role as chair of the ABI: what needs to be done about this? [AB]: The ABI is very committed to this topic. This is not just about gender, it is also about ethnic diversity. But the simple fact is that the workforce is split 50:50 women to men in this sector until you reach senior management and then it becomes 80:20 in favour of men – which is shocking. It is better with executive committees and boards, where women account for 27%, but the fact is that often it is the same women who are on four to five boards. The challenge is how you keep hold of women so that more move into senior management positions. We know the basic problem is that women still tend to be the ones that care for children and elderly parents. If they come back to work, it is often on a part-time basis, which tends to be more junior roles and paid less. So, the women are standing still for ten years while the men continue their career paths, and even still in some cases are paid a ‘daddy bonus’ because they have a family. Companies have recognised this during the past decade and established women’s networks, mentoring and the like, but it hasn’t really made a difference. I think we need to tackle interview panels and change the mindset that hiring a woman for a senior role is a risk, accepting that senior roles can be shared, for example. We have to find out what works and apply it everywhere. Recent research from Mckinsey shows that more diversity leads to better decisions. But this is complex and will take time. [AL]: I certainly now interview more female risk managers than in the past, but, on the whole, this does seem to remain a man’s world. Why do you think this is the case? [AB]: Well apart from what I have just said about women in the workplace generally, perhaps the risk management role is even more challenging for women because it often involves so much travel if working for a multinational company. If the woman is mainly responsible for caring for children and elderly parents, then this will be a challenge. Possibly this brings up the question of how to use technology more effectively to do the job. [AL]: Finally, what do you see as the big three risks that will arise in the future? [AB]: I see environmental risks from two perspectives. First, the weather extremes we are seeing right now, but also, of course, policy failure. We need to tackle climate change at the highest level, but this is not happening currently and is a big worry. Second, mental health is becoming a huge social problem and risk as society struggles to adapt to the rapidly evolving economy, working models and security. Third, technology. This is related to the above. What is the future of technology and work? How do we ensure that work roles remain relevant and interesting, and not just inputting data? We have to tackle some big questions here around where technology is taking us and whether we actually want to go there. How do we ensure people are well equipped for the future?

Time for strong leadership as insurance sector transforms

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