There continues to be change at the top of the UK's insurer board rooms. But instead of relying on the tried and tested recruitment strategies of the past, Consumer Intelligence's Ian Hughes suggests a more meaningful strategy to get the most out of your next CEO appointment.
Over the last few months we have seen a steady stream of CEOs within the insurance industry decide to move on. Brands like Direct Line Group, Aviva, Covea and Swinton have all seen change at the top for various reasons, and rumours are that there are more to follow.
Let’s face it, who’d want to be CEO of a large general insurer? Before you even get off the ground with your strategy for growth, you are being manacled by the dual forces of the Financial Conduct Authority and Competition and Markets Authority, and restricted by regulatory reform from the government. And that’s before we even get in to Brexit.
When you look inwards you will find most of the big ticket items have already been done. Replacing green screens, transformation, rebranding and maybe even digital. There isn’t a magic lever to pull.
Or is there?
One of our roles within the industry is to scan for future trends, to see what is growing and developing and how it will affect insurers. On our adventures into tomorrow, we have seen a shifting paradigm that makes us think that there is the opportunity to take advantage of a once in a lifetime change, but it will require a little (or maybe a lot) of bravery.
Let’s back-up a bit. For the last few rounds of new insurer appointments, we have seen turnaround specialists, like Mark Wilson at Aviva or retailers like Paul Geddes (apologies to you both, your careers are broader and deeper than that, but wait for my point). Both of these have achieved incredible results for their respective companies. As the sun sets on their tenure, we should ask ourselves where will we look for the sunrise.
The next generation of CEOs need to be aware that rising in the East there is a game change, and that new game is called Technology. I’m not talking about digital or fintech or even insurtech. I’m talking about tech-insure.
If you haven’t come across Zhong An or Ping An then it’s time to do some Googling; but let me give you a summary. Zhong An, born out of Alibaba, Tencent and Ping An, is an insurer. They have 433 million customers. They are four years old. Their market cap is about the same as Direct Line Group.
What they have is pace, scale and a way of thinking that is effectively “we are a technology company that plays in the insurance space”.
Ping An is a bit more of a behemoth – 30 years old with 1.4m insurance agents selling their products. That means there is roughly one Ping An rep for each 80 people living in China, and I am including children in that 80 people. Their market cap is roughly 10 times Aviva’s and they are 10 times younger.
This year Ping An’s technology division has spun out eight companies, each one has listed, each one is worth more than $1bn. Ping An now proudly says it gets a higher return on capital investing in Tech than it does in bricks and mortar.
So, as we look around the UK industry for who could be the person who gets the nod for the top jobs at some of the big insurers, we ask “who’s checking their tech credentials?” The big worry here is that the appointment committees of major insurers won’t be seeing this change coming, and their advisers won’t be seeing it coming.
So here are four questions that we think a hiring panel should ask prospective CEOs:
- Do you have any of the following on your mobile phone, and when and where was the last time you used them?
- What do the initials API stand for?
- Which one of these do you think is more important for our future?
- All of the above.
- What was the last SandBox experiment you sponsored?
The answers to those questions will give you a sense for whether the person sat in front of you ‘gets it’.
And if the people on the hiring panel don’t know the answers to those questions then we should be asking the question, why are they doing the hiring? Is the industry doomed, not from the regulator or from Brexit, but because it just can’t move fast enough?
- Loss-making GRP spent £112.6m on acquisitions over its last financial year
- Mike Bruce promoted to GRP group managing director
- Hiscox's James Brady on why cyber knowledge remains a barrier
- I work in insurance: Stephanie Horton, River Canal Rescue
- Top 100 Insurtech: Quarter four update
- Insurtech diary: Getting stuck into insurance
- Marsh boss joins GRP-backed Marshall Wooldridge