Nicolas Aubert is as fierce as he is eloquent in spelling out the role of the broker. Speaking to Reactions at Airmic’s 2017 conference the head of Great Britain at Willis Towers Watson (WTW) is very clear: insurance buyers have never been so well served, and it is the responsibility of broking giants such as WTW to keep pushing.
“For me, everything has to start with the value proposition that we bring to the customer. Remember, we are an intermediary – we offer professional services, and our key aim is to build the best value proposition for our clients,” he says.
The role of the broker is, after all, to represent the insured, and only by driving a hard bargain and do clients receive best value.
But questions about broker fees – and how they are structured – have not gone away, and continue to resonate across the industry. Dominating last year’s Airmic conference, concerns returned to the foreground again at this year’s meeting as the trade body published a report outlining concerns from its members.
This follows a move by the Prudential Regulation Authority (PRA) to investigate broker facilities alongside a thematic review of insurance underwriting and pricing.
Aubert is clear that transparency over fees is the only way that brokers can gain clients’ confidence. But he is also adamant that the current debate fails to capture how insurance transactions have changed: “The insurance companies need to realise that what is an insurance transaction today is very different from 15 years ago,” he says.
“In the relatively recent past, an insurance transaction was an intermediated risk transfer transaction. In an insurance-related transaction nowadays, however, you have the value chain that we have been building as a risk advisor, which is a chain where the risk transfer is happening at the very end; it’s a downstream element.”
At a very basic level, the nature of risks facing multinational firms in 2017 is vastly more complex than it was 30 years ago.
Globalisation means the value and geographical spread of companies’ assets is greater than ever before, and the service package that brokers provide centres far more on the earlier stages of a transaction. Instead of simply obtaining the best price for clients, it is through the process of understanding risks and working out where liabilities lie that brokers offer value.
Aubert says: “Upstream you’ve got all the relationship building with the customer; you’ve got the risk assessment; you’ve got the risk management; you’ve got all the data analytics that are put together for the risk retention and transfer strategies.
“It’s quite obvious to understand how the so-called intermediation value as part of the insurance-related transaction is much more important than what it was in the past,” he adds.
As well as underlining the need to be clearer about the role that brokers play in helping clients understand complex risk, the executive is adamant that when broking firms achieve the best value for clients, it represents good news for carriers as well:
“To be honest it takes us time and it takes us effort. We need to align resources to do that. We need to meet with them, work with them, review data, provide data, and there is a cost for us. We are getting more and more mature about that and we are costing what we are delivering to these carriers. That’s part of the agreement we have. That’s a win for the carrier. And guess what? If there is a win for the carrier, there is a win for the client. And the bigger the win for the client the bigger the win for WTW.”
While some in the industry hold a different view, Aubert is clear that providing a closely-tailored solution for each client benefits insurers as well. Covering the risks of the biggest clients requires a range of specialisms, and in building up a panel of insurers the broker gets to know each broker’s niche.
Transparency over the services offered and clarity about what kind of a book of business each insurer wants to develop helps the carrier in the long run. Aubert is clear that ultimately, developing close working relationships with partners allows firms to get the best value for clients – the ultimate goal for brokers.
“In order to achieve the best win for the client, we build some strategic relationship with carriers to absolutely nail down what they want to do – and what they want to be capable of doing – this has a value for insurers and I believe we can achieve a win for them too, supporting their strategies,” he says.
Illustrating the need for brokers to focus on the analysis of risk and potential exposures, Aubert explains how the 2016 merger of Willis Group and Towers Watson has resulted in a powerful combination of in-depth data analysis and client service:
“Our actuarial capabilities are extremely efficient in terms of modernising. Our value proposition around cyber, for example, centres on the belief that cyber is not only a technical matter but a people matter,” he says.
Aubert underlines the importance of its employee benefits division to the progress of the firm, and the advantages that come about as a consequence of combining
“Guess what? We are relevant for risk and people. When you look at the data we have accumulated on human behaviour and employee behaviour, it makes up an enormous database that allows us to disrupt the market,” he adds.
Should brokers be more vocal in their own defence? “It’s a question of being proud of what we do, not on the defence,” he responds.