Magne Selfjeflot is chairman of Aon's global natural resources business. He reveals the highlights of his 33-year career in marine and energy insurance broking and underwriting in the UK and Norway
You started your insurance broking career in the UK. Why the UK, and what made you choose insurance broking?
MS: I was born in Norway but studied electronics in Sunderland. In 1973, I came back to England to see Sunderland play Leeds in the FA Cup. Having run out of money, I did a brief stint as a hotel night porter before deciding I needed something more permanent. Asked by the employment agency what type of career I was looking for, I said I was interested in anything that paid well and where I wouldn't have to work too hard. "In that case, it will have to be either in insurance or banking," I was told.
The agency sent me for an interview as an assistant cargo claims manager with GL Cognet & Co, a marine insurance broker in Hounslow. The interview, conducted over lunch and two bottles of fine red wine, went swimmingly. Informed that it required one final approval for me to be offered the job, I was taken to a private house where I was greeted by a smiling George Cognet, the chairman of the business, who immediately said, "Let's have a drink." Thinking that I would probably never survive in this environment, I accepted the job anyway.
How did your career progress?
MS: After five years with GL Cognet, I received a letter from my mother asking how much longer the FA Cup final would be going on. Deciding to return to Norway, I joined Norges Brannkasse's offshore department just as the Norwegian energy market began to take off, spurred by the massive growth in North Sea oil. It was a very exciting time to be in the Nordic energy business, and I was fortunate enough to be involved in developing Norway's second-largest energy underwriting group.
In 1983 I moved on to Storebrand, where I became senior vice-president of the company's energy division. During my eight years there, it became the world's largest underwriter of offshore energy business, representing about 10% of worldwide capacity.
In 1990 I was approached by Alexander & Alexander Group to discuss strategy for the energy business. In May 1991, I joined the company as deputy chairman of Alexander & Alexander Marine and Energy in London, now part of Aon.
In 2001, I was appointed chairman of Aon's global natural resources business, with responsibility for supporting its main clients in this sector by developing a global network.
What is the hardest market you have ever seen?
MS: The most severe was in 1993, when the rate for an average North Sea platform was about double what it had been in the previous hard market. It was also significantly higher than post-9/11.
How was business placed?
MS: There were a number of risks for both onshore and offshore business that truly tested the available capacity and beyond. Some could not be fully placed. It was a good time for underwriters but very difficult for brokers to complete on risks, regardless of price.
What was the softest market you have ever experienced?
MS: It was the end of the 1990s. One particular risk had changed broker three times in three years, and on the final go-round the gross premium was less than the commission had been at the start of the process.
Who is the most interesting underwriter you have come across?
MS: Gale Coles was an energy underwriter for Janson Green in the early 1980s. He was very skilful and really knew his business, but sometimes his line of questioning could be a little bizarre and his decision-making process difficult to follow. During his time, he was one of the best and most respected leaders in his area of the market.
Any amusing anecdotes?
MS: When I returned to Norway for my interview with Norges Brannkasse, I dressed up in my best dark pin-stripe suit, white shirt and tie. On greeting me, the interviewer said, "Before we begin, may I offer my sincere condolences on your bereavement." One of his colleagues had to explain quickly that I was not on my way to a funeral but that business attire in London was much more formal than in Oslo.
What was your most satisfying business win?
MS: When Storebrand was appointed to act as insurer for Norpipe in 1983. Norpipe was an integrated transportation system in the North Sea carrying oil and gas from Ekofisk to the UK and Germany. Up until then, the London Market had dominated the North Sea. This was the first time that Norwegian underwriters - with Storebrand as the lead - had successfully competed with leading markets and brokers to win a major energy account. It opened the door for continuing development in this industry sector in Norway and brought international recognition to the Norwegian market.
Any regrets or unfulfilled ambitions?
MS: No. Over my 30-plus years in this business, I have always been very fortunate to have bosses who gave me the opportunity to venture beyond what was conventional or tried and tested. I am one of those exceedingly lucky people who still consider it a joy to go to work. I have travelled widely, met many people and made lots of friends worldwide.
What do you see as the biggest challenge for today's market?
MS: Unquestionably, it is to change the business model to comply with the latest regulatory requirements, and to become more efficient in service delivery and reduce the cost of doing business. The process of placing business at Lloyd's is truly antiquated. I don't have the perfect answer, but I do know we need to move forward into a more efficient environment.
What is the best career advice you have ever received?
MS: On joining GL Cognet, I was told I could not work for the company unless I became an insurance professional. The boss insisted I study my CII exams and said he would pay me a £50 bonus for each subject I passed and give me a £50 pay rise on passing the exams. As my starting salary was £1,460 a year, this was a very strong incentive.
He also said always to remember the saying "my word is my bond". He told me, "You have to have the trust of the market, otherwise you are nobody." They were very wise words and I have always stuck to them.
What advice would you give to a fledgling broker?
MS: Make sure you get your professional qualifications as soon as possible. They will stand you in good stead throughout your career, and in the short term they will ensure you are better paid. Insurance is seen as the only remaining profession for amateurs, and we have to change that perception. Finally, remember, this is a fun business that offers a wealth of potential and opportunities.
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