interview
Mark Cliff
MANAGING DIRECTOR FORTIS INSURANCE
Widening the capabilities
Mark Cliff is the Managing Director of Fortis Insurance Limited and spoke with the Editor on the occasion in March when the 2009 results were announced in the Fortis London office at 5 Aldermanbury Square
AN: Here we are on up the 17th floor admiring the view looking down onto this part of the world. That would appear to be exactly what Fortis is doing in many areas - beating the market in UK private car; consistently coming out top in broker service surveys; and with your ratios of management costs to claims incurred less than half of some of your rivals. So where do the compromises start to bite?
MC: They don’t! We see service as a key differentiator and will not compromise on delivering this.
AN: Yes, it’s good to hear that great service does make a difference, particularly for affinity partners, but how much pressure does that impose on you to keep premiums competitive so that such partners can compete with their rivals in the price war?
MC: As with all lines of business, keeping the price competitive is key to building a successful business model. We work closely with our affinity partners to jointly agree pricing strategies, and we have open relationships, which allow good communication between both parties. We jointly agree business targets and review regularly throughout the year.
AN: But surely there’s an anomaly here? All your affinities,
10 insurancepeople APRIL 2010
when stating why they chose Fortis, talk about service levels and claims handling prowess, but never mention price. And yet their TV advertising seems to talk about nothing but price?
MC: As part of the tender process we have to prove our competence across a wide range of capabilities, of which service and price are key elements. We design product and pricing to match the affinity customer base, as such some of the affinity partners do value service related messages and their customers are prepared to pay for the higher quality product. The UK market is commoditised so price is a key theme in advertising, but the affinity model allows more bespoke customer proposition to compete.
AN: A trait that does seem to fly in the face of current market practice is that Fortis is not afraid to forego market share in return for profitability. For instance, your motor volume has decreased in recent years. How are you able to bite that bullet when so many of your rivals find it so difficult to do so?
MC: We have a focused underwriting strategy, with the aim to grow the business sustainably. As with all markets there are cycles, and the UK motor market in 2009 was soft, as such we remained focused on writing profitable
business. We also have a very low cost base so are able to deal with fluctuations in volume more easily than our competitors. Whilst we are ambitious in our plans to grow this is not at the expense of profit.
AN: One of your stated aims is to make it easier for brokers to deal with Fortis. The surveys suggest you’ve been doing that quite well for some years, so is there still scope to make things even better?
MC: Brokers rely on Fortis to deliver high-speed, high-quality service, coupled with efficient and informed decision making, and the evidence shows that we
consistently outperform the market in this area. Industry, partner and customer benchmarking place us in top position for service and 2009 was no exception. We achieved top positions in broker nominated surveys, including that by Broker Network, whose members were most satisfied with Fortis personal lines and commercial lines; and Thomas Carroll who voted Fortis ‘Personal Lines Insurer of the Year’ in 2008 and 2009. We were also the first ever general insurer to achieve the Gold Standard for Insurance in 2008 and then again in 2009. However, we will not rest on our laurels and remain committed to improving levels of service. By example, over the past year we
have restructured our commercial underwriting and business development team in response to broker feedback, providing dedicated points of contact; we have significantly increased our commercial e-trading capabilities, improving the efficiency of commercial lines transactions; we have also undertaken a series of broker forums around the country to engage brokers where we have both strong and developing relationships in place. As a result, these actions enable us to build stronger relationships with our brokers, drive efficiency, and improve underwriting quality.”
AN: You also say you will extend the depth and breadth of your broker proposition. What’s happening there?
MC: In addition to enhancing our broker and customer service, we are continuing to build on our product portfolio, to meet their needs. By example our recent launch of Fortis Legal Guard supports alternative income streams for brokers and the development of our commercial proposition responds to broker feedback that they would like to see us replicate our personal lines proposition in the commercial lines market. Working with the likes of Acturis and PowerPlace, we have also
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