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It’s a year after broker Willis and HR consulting firm Towers Watson officially merged and New Zealand’s CEO Peter Lowe is still on a high about what that move represents.
“The highlight for 2016 for us was definitely the merger. The ability of Willis Towers Watson to bring a whole swathe of new service offerings to our customers is fantastic,” he told Insurance Business.
“Previously we weren’t in HR consulting, or talent reward management or executive compensation, but these are all things that clients need and there was only a limited offering in New Zealand, so that’s definitely a highlight for us from our company’s point of view.”
The client-focused pitch of both companies has also triggered a move to increase the company’s geographical footprint in New Zealand.
“If you don’t have clients, you don’t have business,” Lowe said. “With Willis Towers Watson that’s our motto, we live and breathe by it, and that’s part of our geographical push.
“We’ll be opening at least one or two regional offices this year and that is all based on our belief that you have to go to the customer, the customer won’t go to you, and with over half of New Zealand’s population living outside the major cities we said let’s take our business offering out to the regions.”
Lowe said the Kaikoura earthquake was definitely the key issue of 2016 for the industry as a whole.
“It was exceptionally large and so the effect it had on Wellington particularly I think that scared a lot of insurers, especially with Wellington Council asking for a number of buildings to be torn down.
“It’s reawakened insurers that we’re still an earthquake risk.”
The aftermath of the earthquake would of course will be a defining element of 2017 too, Lowe said, with work getting the EQC and the insurance industry on the same page a considerable challenge.
“The Kaikoura earthquake [MOU] is an example of better communication between the two bodies but it’s still not perfect and until that happens we will suffer bad press around settling claims even though a lot of it’s not the industry’s fault.
“So we need that primary driver to better recognise that the quicker we settle the claim with one assessor it’s cheaper across the whole board and the customer’s happy,” Lowe said.
“As well as the FMA review of financial advisers and seeing how it affects advice given by brokers, I’ll be particularly focused on the EQC changes and earthquake capacity and working with IBANZ to ensure that our voice is heard.”
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On a more global scale, Lowe is deeply concerned about the US Federal Reserve System and the movement of interest rates, so much so that he has singled out Janet Yellen, the chair of the Board of Governors of the Federal Reserve System, as his specific individual to watch in the year ahead.
“They [interest rates] haven’t moved for a number of years, they’re very low.
“Janet Yellen has indicated that there will be increases this year some time, but the more pressure that comes on US interest rates as they rise, the more money will start moving into other investment strategies.
“That will help the underwriting world and insurance companies because they’ll make a better return of investment; the other side of the coin is it will take out a lot of the capital that’s come into the insurance market as they chase greater returns somewhere else, which could have a capacity effect globally.”
Lowe added: “I don’t think this will happen overnight but I think we have to be conscious of what she does and how she responds to the change of government in the US and the new inflationary style policies that President Trump is bringing in and how she reacts to that because it has such a global effect on the world’s capital markets.”
Another recurring topic high on Lowe’s priority list is education.
“For us, that’s a big driver, getting the world of insurance broking and consulting up the tree so that we’re a key part of the financial services industry and it is perceived as a good career pathway.
“We want to raise the profile so that we are well represented, attractive to the working community and continue to offer diverse workplaces.”
Lowe admitted insurance was not the ‘sexy beast’ of financial services but work needed to be done to increase the awareness of all graduates – from engineering, to law, to the arts – to recognise insurance and risk as a great career option.
“We have to continue our push into tertiary education, but also potentially look into school leavers. We can train them up ourselves and take them through the whole process to become insurance brokers.
“I think we can achieve this if ICNZ and IBANZ work closely together to promote the industry, because, quite frankly, it’s a really good, well-compensated career choice for men and women and at the moment I don’t think we’re promoting that well enough.
“If you join us in New Zealand and say you’d love to work in Australia, US or UK, I can work out a career plan for you and there’s not many industries where you can do that, so there’s a number of exciting things we can offer.”
Not surprisingly, when asked what would be the number one advice he’d offer fellow insurance brokers, Lowe cites education but also a commitment to client focus.
“Get qualified. If you don’t have any qualifications, sit the IBANZ IQ course, make sure your CPD is up to date under IBANZ rules, and stay one step ahead of wherever regulation is going to ensure that you don’t get caught out by it, that is a massive driver I think.
“Client focus is at the centre of what we do, and it’s the reason we have clients, insurance brokers who are just starting out to those that have been in the industry a long time should never lose that focus.”
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