Canadian Underwriter

Determined. Driven. Bold.

April 26, 2017   by Gloria Cilliers

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Rowan Saunders: Economical Insurance


What’s it like moving from an international company (RSA Canada) to a Canadian one?

I was very proud to help build RSA Canada into a strong business. One of the advantages of an international business is getting insight from other countries on, for example, customer trends and best practice sharing. In a Canadian business, the big advantage is that you do what’s best for the Canadian brokers and customers. You’re not fighting for global capital, you’ve got more control to make the right decision for the local business, and you’re not being second-guessed on whether there’s a better use for the capital in some other parts of the world — it’s a major advantage. From a personal perspective — my role at Economical gives me more autonomy than I would’ve had in the past. As opposed to leading a big division of a global company, you’re the ultimate decision maker in the company. It has its own set of pressures, but it’s very rewarding. You’re able to be more agile and do what you think is truly best for the company.

Any surprises about your new company?

The size of the agenda! I’m delighted that I joined Economical at such an important time in its 145- year history. It’s the first P&C insurer to go through demutualization leading to an IPO. It’s a company that recognizes that our industry is evolving rapidly and disruption is forcing us to do things differently, so it invested in creating Sonnet, a market-leading digital direct insurance company. At the same time, we’re modernizing our technology platforms to provide our brokers with enhanced capabilities. I was also pleased to find the amount of energy, optimism and focus on customer service in the company.

What was your first day as CEO like?

I remember thinking back to when I first became a CEO 13 years ago, and how that journey led to this day. Looking back, I think it’s always important to understand you have to listen and learn about the business before jumping to any preconceived ideas, because every organization is different. Also, to understand you have to build the best team possible, because you’ll need their support to be successful. I’ve spent almost 30 years in the industry, so I was able to get up to speed quickly. The team was welcoming, and willing to share challenges and major initiatives. I just listened. And then spent the first month engaging with almost every employee across Canada and our top brokers in nine cities, evaluating the business, strategizing and then making rapid decisions to drive the business forward.

What makes a CEO successful?

A CEO needs to display energy, integrity and intelligence. But, in a large business, it’s impossible to lead on your own. Your team becomes critical, and taking time to develop a strong team was my first priority. Typically, in a new role, you assess the performance of the team and sometimes it requires changing some members. You have to set clear rules of engagement under your new leadership. The most effective, agile teams are diverse, carefully selected and trust each other. Being transparent and building trust will enable the organization to move forward quicker.

What’s been the most challenging or rewarding?

A big reason why I joined Economical was the massive opportunity to lead the company through demutualization and become a publicly trading company. It’s a unique opportunity in the Canadian marketplace, and the goal is to build a truly best-in-class market leader. The challenge? There’s a lot to do simultaneously to achieve that, and a reasonably tight timeframe to do it in. The most rewarding has been the incredible support from our brokers and knowing they’re determined to help us succeed.

Who’s your mentor?

As a child growing up in a sports-mad South Africa, I looked up to rugby stars. But my biggest mentor is my dad, Brian, a retired insurance broker and who often gives me advice from a broker perspective. I respect him for his success and judgement in business, and for his bravery and foresight to emigrate our family to Canada in 1984 (I was 19). He was the one I turned to when I made the big career decision to join Economical, and he told me to jump at the once-in-a-career opportunity. So did my wife, Susan, who has been an incredible support. If our children, Michael and Matthew (both studying at Western University) and Sarah (Grade 10) ever go into insurance, they know they can get advice from Grandad.

What are your brokers concerned about?

Personal lines brokers are interested in understanding the role of technology and how customers are using it, and what they need to do to adapt. They’re concerned that their insurance partners haven’t yet found an effective enough way for brokers and underwriters to eliminate the friction and duplication between the two. Commercial lines brokers are concerned about attracting and retaining the best talent.

How is Economical helping their brokers?

We’re investing $125 million into the GuideWire policy administration system, to improve capabilities for our brokers. We’re investing in advanced analytics for competitive pricing, to set them up for success. We’re undergoing a strategic review of our $800-million commercial lines business with the view to expand our appetite and enhance our capabilities. We hold regional broker council sessions to gain their insight when we build out technology and processes. A dedicated team helps brokers with financing and investment opportunities. We also plan to share insight from Sonnet and adapt that for our brokers.

What’s your first step after demutualization?

We’re looking forward to introducing ourselves to the marketplace as a strong Canadian-focused P&C player. Once that’s done and we’ve gained full access to capital markets, we’ll more aggressively pursue M&A opportunities.

What’s the biggest challenge and opportunity for brokers in the next three to five years?

The top challenge, and opportunity, will be anticipating and adapting to the change in consumer expectations, driven by changes outside our industry. It’s important for brokers to truly understand and adapt to this, and to be prepared to invest in their brand, people and technology.

What are your top three priorities for the next three years?

Lead the organization through a successful IPO; buildout our infrastructure and expand our commercial lines capabilities; and scale up the business by growing Sonnet and transforming and growing the broker channel. I did say the agenda is big!

Heather Masterson: Travelers Canada


What makes a CEO successful?

“It’s all about the team. I’m privileged to work with a strong, diverse team who have a tremendous amount of experience, knowledge and skill, and who aren’t afraid to challenge the status quo. I also believe a successful CEO, or any committed leader, should adhere to a servant-leadership approach, predicated on the notion that the more senior you become, the more people you are accountable to.”

You joined Travelers Canada as its COO in September 2015. What was your first day in the new role of CEO like?

Much of it was spent thanking prior leadership for their contributions, spending time with my new team and connecting with our broker partners. But what stands out the most was the amount of support I received from across the industry and our organization — from my colleagues across Canada, senior executives in the U.S., as well as our broker network. The number of phone calls, emails and notes offering congratulations and encouragement was truly humbling.

What’s been the most challenging or rewarding?

The time spent with our employees and brokers has been the most rewarding. I traveled across Canada, hosting over 60 hours of conversation with employees in 11 office locations, and met with many of our brokers in 10 major cities from coast to coast. I had the opportunity to collect valuable feedback and gain important insights as to how we can become a better organization for our employees, a better business partner for our brokers and a better insurer for our customers. The most challenging aspect is that this type of commitment takes a significant amount of time, while other work continues to move forward.

What’s on your agenda for 2017?

Given the trends and structural changes affecting the industry, we need to make the necessary advancements to ensure we’re not only competitive today, but also tomorrow and beyond. Prioritizing our broker relationships and helping them transition from a business model for today to one that secures their future tomorrow is absolutely critical. We’ll do that by investing in our people, in technology and by understanding our customers better, which will guide us to truly enhance the customer experience.

Who do you turn to for advice?

I’ve always looked to my father Godfrey “Bud” Wedgwood for trusted and sound advice. He has been in the insurance business for nearly 60 years and, at 79 years old, is still deeply committed to the industry, running his own claims adjusting firm in St. John’s. He’s been a key contributor in helping me become who I am and, together with my own life experiences, has helped shape my personal and professional core values — family first, servant-leadership, the importance of teamwork, integrity, fairness and always doing the right thing, especially when nobody is looking.

What do you teach your daughters about shattering the glass ceiling?

I have two very sweet and beautiful daughters, Sarah (12) and Lauren (10). My husband of 18 years, Jim (the only one not in the industry!) and I had a very proud parent moment recently when the girls both received the same leadership award at school for honesty and compassion. I hope I lead by example and teach them to be strong, confident, kind, focused and to work hard. I hope when they are my age there is no such thing as a glass ceiling.

What are your brokers’ main concerns?

The pace and impact of disruption and change in the industry. Consumer needs and demands are evolving, and the trusted advisor model needs to adapt to technology impacting delivery of products and services, a changing customer demographic and evolving product offerings. They’re equally as concerned about the need to ensure that the independent broker channel continues to survive and thrive in this environment. Independent brokers are looking for companies to support them and their value proposition. Travelers Canada is one of the few remaining insurers that continues to place its faith and trust in the independent broker channel and its ability to deliver meaningful value to the customer.

One of the ways Travelers Canada is helping brokers is its compensation model reform. What’s been their feedback?

We wanted our new broker compensation model to address current market realities. I believe we have achieved this goal and the feedback from our broker partners has been very positive. Today, many brokers are looking to make greater investments back into their business as they face increased costs associated with preparing for the future — including talent, technology and consolidation. Broker compensation is often an unbudgeted source of revenue, but now more than ever it’s become very important in assisting brokers to achieve these priorities.

How does Travelers tailor its business approach to doing business in Canada?

We’re proud to be able to draw upon our parent’s strengths and benefit from its proven track record in the U.S. We’re committed to taking what works in the U.S. and tailoring it to fit our Canadian marketplace. Being able to access our parent company’s deep capabilities has helped us on every level, including now having a market-leading loss ratio in Canada.

What’s the biggest challenge and opportunity for brokers in the next three to five years?

The biggest challenge for brokers will be effectively enhancing the broker model. Brokers are increasingly competing with technology that allows customers to purchase products when and how they want. However, while speed and efficiency are important, so too is the need for good advice. My view is that the personal touch, the human interaction and the basic fact that brokers add real value, will ensure the viability of the model in the long run. This challenge is also a tremendous opportunity. Those brokers, whom I describe as “opting-in” by investing in their businesses, driving scale through organic and inorganic growth, searching for great talent inside and outside the industry and investing in technology, will have a competitive advantage in the marketplace of the future. Those are the brokers that we want to be supporting.

What are your top three priorities for the next three years?

Continuing to focus on financial and operational excellence, broker relationships and customer-centric innovation and engagement and talent development.

Martin Thompson: RSA Canada


What makes a CEO successful?

I don’t know if I can regard myself as a success yet! My success is largely reliant on the quality of my team, and the dynamic within the team. We have good organizational values and an engaged workforce, which makes my job a lot easier. I’m proud to see the desire our people have to look after customers. We don’t always have the best technology or processes to help them do that, but we’re working on it.

You’ve been with RSA for 20 years. Any surprises in your new role?

The most pleasing surprise was discovering this untapped energy and passion in the company when I went around the country meeting our 3,300 employees. I recognize I have an opportunity in my new role to unlock that energy by giving our people the right tools, processes and strategic focus.

What’s been the most challenging or rewarding?

Honestly, the biggest challenge was taking over from Rowan Saunders, who’d been in the job for 12 years and had done an excellent job building the organization, from where it was in 2003 to when he left in 2016. He had this great track record and was very highly regarded in the industry. Those are big shoes to fill and I needed to figure out how to live up to that. But, at the end of the day, I needed to realize I can’t be anyone else but me. I need to lead in my own way, and that’s enormously different from how the job was done before.

How would your peers describe your leadership style?

Transparent and direct. I think I’m very ambitious, with a high aspiration for and massive loyalty to this business. I set very high expectations, which people think is sometimes too high, but that’s not a bad thing for the organization. At the same time, I’m there to help and coach people. I generally think I’m fair in how I treat, manage and lead people. I like to be out talking to staff, brokers and customers, to understand what they’re thinking.

What advice would you have given yourself on your first day as CEO?

I would’ve said prioritize things that really matter, get progress on that first, and then go on to the next thing. There’s a lot of demand on a CEO’s time, and the only way to be effective is to prioritize. On my first day, I had an enormous sense of relief. I had known for a week that Rowan was leaving but had to keep it quiet until the official announcement. Finally, I could talk about it and get on with the job. Rowan and I had a fabulous relationship and will always remain friends. When the day came, I was ready. All you can do is seize the moment, and be the authentic leader you need to be. And in that moment, I thought of the incredible support from my family — my wife, Wendy, and our boys Keir (8), Owen (6), Rory (2).

Who do you turn to for advice?

I’ve been very fortunate to have worked for a number of good leaders in my career, all of whom have shaped my views on leadership. But by far, my dad James, who lives in Scotland, has had the biggest impact on my life. He was an engineer in the mines and I used to work with him during summer vacations from high school and throughout university. When you work in the mines you do nothing less than 100 percent correct, as people’s lives depend on it. He taught me a lot about the importance of quality of work. That strong work ethic has driven me throughout my life.

What are your brokers concerned about?

Immediate pressures, including talent, and emerging pressures, including technology. Brokers want to understand how technology, that’s shifting customer expectations and massively increasing transparency, will affect their business. There’s been a lot of talk about the death of the broker. We believe people will continue to use brokers but they want a better experience doing it. So, the question for the broker is: How do they demonstrate their value going forward? There are some barriers, for example it’s difficult for insurers to build technology that interfaces with several different broker management systems. There’s also some confusion around what insurers starting to own distribution will mean for the independent broker channel. So brokers are wondering who to partner with in future.

How do you help brokers strengthen customer-centricity?

By involving our brokers in solutions we build, and sharing data and analytics. By being clear that we’re a broker brand and that won’t change. We’ll continue to help brokers succeed — 70 percent of the investment we’ve made in the last couple of years was towards the broker channel. Yes, we have Johnson (direct channel), but our business has been half personal lines, half affinity for the last three to five years. We’re actually seeing more growth from the broker channel than affinity. I think it’s due to the improvements we’ve made in pricing, service and being more externally focused.

How does RSA tailor its approach to doing business in Canada?

We’re fortunate to have a CEO who believes in winning in your local market and not pushing a U.K. mentality in Canada. Being part of a multinational company enables us to get the best of both worlds: the freedom to run our business in Canada, and the advantage of tapping into our U.K. or Scandinavian business expertise to gain insights on, for example, pricing, claims and digital.

How successful has your pricing reform been?

We were behind on pricing sophistication, agility and transparency. After implementing the new pricing strategy, we’ve improved retention by four points and new business is up 40 percent. The only area we can’t move forward at the same level is auto, due to regulatory constraints.

What’s the biggest challenge and opportunity for brokers in the next three to five years?

Opportunity: figuring out how to deliver a winning customer experience that demonstrates your value. Brokers should be investing in data and analytics to help them understand their customers better. Challenge: selecting the right carrier and technology partners to help them deliver that experience.

What are your top three priorities for the next three years?

Rapidly improving the customer and broker experience by focusing on capabilities that matter, including pricing and underwriting. Understanding the customer better though data and analytics. And selecting the right broker and technology partners to augment our offerings.

Copyright © 2017 Transcontinental Media G.P. This article first appeared in the April 2017 edition of Canadian Insurance Top Broker magazine

This story was originally published by Canadian Insurance Top Broker.