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Reflections of a Chief Underwriting Officer

by Paul Culham, Group Chief Underwriting Officer on

A year since taking on the role as Group CUO of TMK, Paul Culham shares his thoughts on the state of the market, the role of the CUO and the need for flexibility.

A day in the life of a chief underwriting officer has changed unrecognisably in the 30 years that I’ve been in the insurance market, and notably even in the one year that I’ve held the role at TMK. In the old days, it was all reams of paper full of statistics and plans for taking on the traditional fire, flood and wind risk exposures that affected the bricks and mortar our clients’ businesses were built on. Today, we are glued to the screens in our hands, on our wrists and on our desks; the quality of information is more complex and current than ever before; and our clients’ risk profiles have changed dramatically.

Intangible assets are driving the businesses of today and tomorrow, with companies like Google, Airbnb and Uber whose revenues are underpinned by the strength of their brands, intellectual property or software. But one thing that hasn’t changed is the need for corporate and personal flexibility.

Amongst the debates around pricing, disintermediation, Brexit and technology, one aspect being overlooked is agility and how we distribute our products. The insurers that can offer choice in the way customers can access products, and that are giving the best customer service, will be best positioned to survive the myriad challenges under the spotlight now. And that flexibility comes from insurers like us with multiple platforms but with a single culture.

The industry is going through a huge amount of change: over the next few years it will be driven by technology, soft pricing and new and abundant capital. In this context, insurers need to maintain their relevance and provide both what customers and capital providers want.

We are on the cusp of a technology-driven revolution, primarily around distribution and data analysis, resulting in more e-portals which will give customers improved access to specialist risks online and more sophisticated information to achieve our ambitions. Success will come in combining the old and the new – marrying the old-fashioned benefits of being a relationship-focused company with being a modern data driven and customer-focused company. The combination is critical.

The market doesn’t yet understand how much of a change that could be. The protests about e-placement are driven by people who say ‘we have a way of writing business – and we want that replicated electronically’. That’s not going to happen. The way business is placed is going to change, and it needs to be accompanied by a change in philosophy and mindset.

We’re lucky at TMK having retained the best of the Kiln and Tokio Marine Europe cultures. We’ve retained the underwriting focus of what we do: our underwriters are empowered to make our underwriting decisions. And with that empowerment comes accountability. Moreover, in a world of customer-centricity, claims service is now part of the sales process, not just the end-game.

In a few years’ time, e-placing will be mainstream; Lloyd’s won’t be what it is today; and London won’t be wholly commoditised – in fact the differentiation between a commoditised line and a specialist line will become more important. The market will maintain high degrees of speciality, which in turn retains the need for specialised brokers and underwriters – but everyone in the chain needs to understand what value they’re adding.

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