INTERVIEW
Market cycles are flattening rating increases being carried, will be over, say, the next five needed to support this line as
more now, with a narrower with motor, casualty and years? well as the hits the account
range between peaks and property all showing positive takes from incidents like the
troughs and this is largely rating strength compared to RW: Climate Change is a big 2007 floods, mean that
caused by insurers having last year. Increases have been challenge to all of us. There profitability is currently very
access to much better steady all year and we have have been localised incidents hard to achieve on this
management information now seen our best three months most years even if we’ve account.
nowadays. in July, August and September. I managed to avoid major Skills levels in the industry
Insurers are now able to hope this trend continues. catastrophes. These local are also becoming an increasing
drill down into their The area we’re seeing the incidents often add up to £100 challenge for insurers. Over the
performance much better and largest increases is commercial million or £200 million each last few years we’ve introduced
make more accurate forecasts motor, both on the fleet and and so are significant hits to an Underwriting Academy and
on where results are heading at vans accounts, where strong the market. 2007 of course, saw new apprenticeship schemes to
today’s pricing strength. Most progress is now being made. major flooding which cost help build and develop the skills
insurers recognise that today’s The latest figures available insurers something approaching in our business. This is
pricing levels are not adequate (September 2009) are over 10 £3 billion. Unfortunately, supported by new competency
to deliver the necessary levels per cent increase. Increases are current rating levels don’t frameworks, to help us
of profitability going forward also coming through each support these incidents – understand each individual’s
and so action is needed now. month this year on property regular or less frequent. development needs better.
Putting rates up however is and casualty, but at a lower Solvency ll will also be a Profitability of insurers’
restricted by the economic level than motor (September challenge and is driving core accounts will also be a
environment, with our 2009 is over 5 per cent). insurers to rethink their challenge. Rates need to
customers struggling more at definitions of profitability. With increase!
the moment with their own BM: Where do you think the the short-tail nature of Another challenge I’d
business results and rates are biggest challenges for insurers property business, the capital mention is image. I believe that
also being held back by we all work in a great
competition and new entrants profession and deliver great
into the insurance market.
Roy Watkinson - his rise to the top
products to our customers, that
help them cope with life’s ups
BM: Are rates really going up -
1973 Architects, Bournemouth
and downs. Insurance enables
or is it a case of those at head
1974 Provincial, Bournemouth, trainee underwriter
businesses to set up, invest and
office saying they want to see
1977 Provincial, Nottingham, property underwriter
grow and helps individuals buy
this, but local branches are their homes, protect their
unable to push through because
1979 Provincial, Sheffield, head of property
families and take risks that they
of competition?
underwriting
would otherwise need to shy
1984 Provincial, Edinburgh, head of away from.
RW: There’s some truth in what
property/casualty underwriting
Despite this great story we
you say! Seriously though, I
1986 Provincial, Birmingham, head of
have to tell, we usually only
think most people recognise the
property/casualty underwriting
hear about the small number of
need for rates to increase, cases that go wrong. This is
whether they’re in an insurance
1991 Provincial, Kendal, property insurance
very unrepresentative of the
company head office, a branch
manager
great job everyone in our
or broker’s office. 1996 Provincial, Kendal, property insurance industry is doing and I believe
Success in carrying rating
manager and national broker development
that changing this image and
increases does depend on the
manager
perception is a responsibility on
market you’re in and the class
1997 AXA, Kendal, commercial underwriting
us all. Particularly with the
of business involved. Our problems other parts of the
commercial accounts at AXA
director
financial services industry have
are dominated by SME business
1999 AXA, London, commercial underwriting
been through recently (such as
and property owners, with only
director
banks and mortgage lenders),
about 10 per cent of our 2006 AXA, London, technical and commercial it’s important that insurers and
account in the mid-corporate
underwriting director
brokers rise to this challenge.
area. We are certainly seeing Large fire losses is another
Insurance Brokers’ Monthly 9
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