We recently spoke to Willis Asia CEO Adam Garrard on what it takes for brokers to come out on top in this evolving global landscape. He shares views on how to empower clients in managing risk, and showing the tangible value of insurance.
As a broker, Willis helps clients identify and manage their risks, and it envisions doing it well enough that clients can name their own price when placing a risk in the market.
“We want to help clients understand their risk as precisely as possible, and to be very confident of our understanding of their industry and the severity and probability of a risk, so much so that they can offer the risk at a price they’re willing to sell it at, rather than buying insurance at a price the insurer is willing to sell it at,” said Mr Adam Garrard, CEO, Willis Asia.
The ability of an insured to auction its risk, rather than merely place it out is a subtle yet significant shift, he added.
“What you’re saying to an insurer is that I’m willing to sell this risk only at this price. Otherwise I’m happy to retain it because I’ll get a better return rather than if I sell it to you.”
“And that’s where we hope to get to with our clients,” said Mr Garrard.
Innovation across the board
While predicting and assessing risk will never be an absolute science, brokers will need to understand their clients’ risk more intimately than before. Hence, there needs to be greater innovation across the spectrum from risk identification, risk analysis to risk transfer.
In terms of identification of risk, Mr Garrard said brokers need to cultivate industry experts who have specialist sector knowledge in areas like energy, manufacturing, technology and so forth.
“We need more industry experts, not just generalists. And we need to bring this expertise to clients and help them identify specific risks in a particular industry,” he said.
He also stressed the importance of going beyond just the technical aspects of a business, but critically understanding the goals and strategic direction of the business. Brokers increasingly need to have business conversations with clients, not an insurance conversation.
“Our job is not to get clients the cheapest insurance premiums, but help them reduce the total cost of risk throughout their business journey. And that can be through having better risk controls in place, or buying insurance at the optimum level.”
Balance between risk avoidance & transfer
The second aspect revolves around assessing risk, and brokers will increasingly require a more scientific approach for the transfer of risk, using sophisticated analytical tools.
“Data is key when it comes to assessing risk, and how you analyse that data and evaluate the probablility and severity of risk becomes very important. So the analytical broker is everything.”
In the process of understanding risk, transference is only one option for clients, and brokers would continually strive to find a right balance in mitigating it.
“We help clients understand the optimal level in choosing between avoidance, control, transfer and acceptance of risks,” said Mr Garrard.
Turning insurance into a competitive edge
Adopting a holistic way of analysing and managing risk is not an easy process, and requires cultivating strong and trusted relationships with clients.
“As a client manager, the mindset should be that you are employed by Willis but you work for the client. You have to be a confidante of the client, where they view you as one of them – someone the client can trust enough to tell you where they want to go with the business, knowing that in this journey their risks will be managed.”
When done correctly, Mr Garrard said that brokers can truly demonstrate how risk management and insurance can become a competitive edge rather than a cost.
“If you get the balance right between avoidance, control, transfer and acceptance of risk, then you’ll be spending less on the total cost of insurable risk. The saving will go to your bottom-line, adding to your earnings multiple, thus creating greater value for the shareholders.”
Willis continues to grow in Asia and recently completed its acquisition for specialist broker Charles Monat Limited, one of the leading providers of life solutions to high net worth clients. Charles Monat Limited’s operations will be combined with Willis’ expanding Global Wealth Solutions (GWS) practice, thus enhancing Willis’ GWS teams in Hong Kong, Singapore and Zurich and growing Willis’ footprint throughout the Asian and wider global markets.