IB Talk

Narrator: Welcome to IB Talk the leading podcast for the insurance industry across the UK and Ireland brought to you by Insurance Business. 

Narrator 2: This episode is presented in partnership with Travelers in the latest episode of IBUK Talk. Simon Medhurst, schemes development manager, Travelers Europe joins us for a deep dive into the schemes market and the value of brokers getting involved. Learn how to provide exceptional value tailored to your client's needs. The advantage of a partnership first approach and a robust framework, and how you can create a great scheme. 

Mia: Hello and welcome to the latest edition of IB Talk, the insurance industry podcast brought to you by Insurance Business. My name is Mia Wallace, senior editor of insurance at Insurance Business. And today I have the pleasure of being joined by Simon Medhurst Schemes Development manager at Travelers Europe, to discuss where the insurance schemes market stands and how brokers can navigate the current environment to achieve schemes' success. Many thanks for joining me here today, Simon. 

Simon: It's a pleasure. Thank you very much for inviting me. 

Mia: It's really great to have you. And I must say Schemes Development Manager sounds like quite the substantial title and I wonder if you could tell me about the key responsibilities of your role at Travelers Europe. 

Simon: Yeah, of course you can. Having brought many schemes for many years, I joined Travelers in January 21st as Schemes Development Manager and reporting to Jonathan Foster, our distribution director. I am a member of a distribution team of which Jonathan is a senior member. And basically because of that we operate across all areas of Travelers Business Unit. So my role is really varied and no job is the same obviously as you probably guess, my primary role is is working alongside Jonathan developing delegated underwriting schemes where Travelers provide brokers MGAs with capacity. So the vast majority of that particular work is is managing existing pipeline. And with that I'm engaging with potential clients, understanding what the scheme is about when it's coming to market and what is needed if we're going to to be successful. 

Mia: Given the overview of the market that your position offers you. What do you think makes the schemes market such an attractive proposition for brokers? 

Simon: I think really it's numerous reasons, but if I can just grab them and group them together, it's all about adding value and improving customer proposition. Certainly a scheme demonstrates expertise. It provides clients with confidence that you as a broker are an expert in that particular field. Obviously you can go out as a broker and tailor cover the provision of tailored relevant cover and bespoke cover for any given trade type, affiliation, membership or general needs of a scheme. Is that really at the heart of the proposition? And if they so wish, they can improve efficiencies further by controlling the underwriting process, obviously in accordance with their their insurers partners underwriting guide and that improves service, streamline service because you're reducing the traffic between the broker and the underwriter. So again, it's improving the customer proposition. The benefit for a broker I think really is they can tap into to insurer resources schemes are all about partnerships and providing strength in depth between the broker and the insurer. And both parties working together provides extra resource and expertise and I'm talking resources such as marketing training. Um, I know as a broker I tapped into insurers resources when it came to training and indeed utilizing some of their marketing benefits. 

Simon: But if you look at the direct benefits to the broker, I think having having the sort of the business experience of being a broker, I think the pooling of risks in terms of underwriting under a schemes umbrella means that individual risks are less volatile to huge swings. Obviously there is an exposure there, but it's less volatile. And with that you get an enhanced retention because because the book is is more stable retentions, in my experience, get to late 80s, early 90s. So terrific retention of an existing book there. Then if you've got all the other bits, your distribution and your marketing tools, then that combined with with obviously new business wins encourages a real, real platform for growth and the magic words to a broker that. How are those economies tend to lead to improved financials. So lots of benefits, but think wrapped up without being selfish As a broker, the real benefit is improving your customer proposition. 

Mia: And given the variety of schemes offerings that are available. Simon I wonder what, in your view, is the recipe for the success of a great scheme? 

Simon: Now that is a good question. There's quite a lengthy answer. I think really. Firstly, it's all about that successful long term partnership piece. Both the insurer and the broker has to be transparent with each other, be comfortable with each other and have shared visions and goals. So yeah, ensuring that the partner, both sides, you know, from from a brokers perspective is right with that insurer and vice versa. I think then it's with that transparency piece really focused. It's then having a framework of systems and process controls to, to manage your particular scheme, implement it and run it. And here at Travelers we do that. We have what we call a 4D process, and it's a really good framework just running through those very quickly. It's about discovery, it's about design, it's about delivering and it's about development. And looking at each stage of those, the discovery is really understanding the opportunity, knowing what you want, targeting that particular business, learn about the brokers wider business, understand its aims, needs ambitions and validate all the time making sure it's the right fit for both partners and and working with that shared goal. So that's the first stage. The the next stage is obviously the design by definition. So it's refining and defining the proposition here. I'm really, really lucky because I can bring in a wealth of experts, professional underwriters that are really experienced not only to help design the proposition, but to help me undertake the due diligence process. And delivery is the stage where you go from and this is the core part and the real foundation is from the contract signature to implementation. And I think you have to have key performance indicators, you have to have key milestones and ensure you can measure these with the system controls that I've alluded to and the development is making sure that the scheme doesn't doesn't really sit still, it still fit for purpose on an ongoing basis. You're reflecting whether you've hit your targets. If you haven't, are your customers still happy with the proposition and keeping keeping it refreshed as much as possible? And I think as an ex broker, when I was joining Travelers, I can always remember seeing the 4D process. And it was a real comfort during my own personal due diligence process of Travelers, because I knew then when I saw that, it really told me that the Travelers knew what the scheme was about and what was needed to deliver a scheme because of my previous experience as a broker. And I think a couple of weeks back that was endorsed further because I recently attended an interview with a specialist scheme broker, a client of ours who who worked with us on an implementation program, and they fully endorsed how the 4D process worked for them and how the partnership grew on the back of it, and that that really was those pieces are significant in my experience here. And the article is available, I think on actually the insurance business website. It's a good it's a good article to to look at for the simple reason it endorses everything that I just talked about and answers your question probably more succinctly than I've just done there. 

Mia: So and of course, Simon recipe is only as good as its individual ingredients. And I wonder if you could tell me a little bit about the core ingredients that make up the strategy. 

Simon: Yeah, a lot, actually. I think very much looking at my experience as a broker distribution, I've seen some brilliant schemes failed because of distribution, wasn't there? They had great, they had great wordings, they had great synergy. They, they felt that they were right for the market, but they, they were coming into early. Some have entered markets too late when they were fully saturated. So it's crucial that the partnership knows the market and have robust distribution plans in place. And we at Travelers really validate this during the the discovery and design stages of our 4D process. So I think that's a key one. I've touched on it a little bit wordings. Wordings is, is is crucial getting the wordings right. And that is a real play in a strength of Travelers. But wordings is a crucial ingredient. The transparency transparency piece is a crucial ingredient as well. I've already talked about that. But the thing for me that really defines a scheme being successful is expertise and specialism that adds value and it adds client confidence. And that's really what we're looking for at Travelers. The policyholder gets a lot of comfort in you understanding their problems, challenges, talking to them in a sector language that they're familiar with, and you having bespoke product to cater for their needs and tailor their needs and can accommodate their insurance requirements. 

Simon: And on the back of that expertise, specialism is really capability. I know as a broker we spend a lot of time and money investing in our people to maximize their capability and of course authority levels because it provided not only the customers with the confidence but also the underwriters as well. So confidence staff that are empowered to handle the majority of queries is a strength and then is supported by mechanisms and that is the systems and and service delivery processes. The controls within. Are they fit for purpose? Are they robust enough? And can you as a broker and you as an insurer measure the key performance indicators in indicators that we agreed mutually? And it's about data and it's about performance monitoring and of course it's insurance. So it's service service and more service. So I think those are the the key ingredients and recipes that I've hopefully answered your question in a two part answer. 

Mia: I really appreciate that. It's incredible the range of ingredients that go into making up the right schemes recipe and maybe. 

Simon: Yes, it certainly does, you know that and think they're just the core ones. Now, there could be an ingredient that's specific to a specific scheme because every scheme is different. It's very diverse by by its definition really. But yeah, I certainly think they're the key ingredients. And the recipe is that that real framework. 

Mia: And how does Travelers Europe support clients and provide great service in terms of its own schemes? 

Simon: Proposition I think the key one for me is provision of expertise. I knew early doors when I joined Travelers that I had access to quality, experienced people. And what has really been enlightening as I've embarked on this two year journey is that I do not only have access to them, I can actually bring them in to the core parts of our process as and when required, but particularly through that design process and development process. And it's been outstanding in terms of the quality and the experience and the professionalism I get from from key players in that field. So I think that's for me personally, for a broker, what Travelers can offer, I think financial strength and the security that brings with Double-A rated so excellent security by Standards and Poor's. And we can provide paper that's either company, paper, syndicate, paper. And indeed we've also got an straight Brexit solution. So, so a lot of financial strength and capability there. Um, talking of capability wordings, I've already alluded to it in a previous answer, but wording capability is very good and it's been evidenced in a number of schemes that we've won. There was a certain scheme that we had that had lots of wordings and the work that we did was amazing and the broker really appreciated it. Not only did we tidy and enhance the wording, we broadened cover and streamlined a lot of of what was previously on offer. Um, and also a recent one that we have won, which was an MGA. We spent a lot of quality time refining a policy wording that's really fit for market and bespoke to that particular insurance sector. And I know it said millions of thousands of times in the industry, but insurance is only a promise on a piece of paper and it only comes to light when there's quality claims service or when there is a claim. And and and we I know that the key thing when I get an opportunity and the first thing I do is pick up the phone to to our claims relationship manager and talk to her about the specifics and the requirements of that particular scheme, because we do bring to the table a quality claim service and it's important that that the claims know early the nuances of that particular scheme. And I think my last answer, just thinking about it, is probably our 4D process, which I've just spent about a good ten minutes talking about. So I won't bore you with that again. 

Mia: I must say, I think it's a fantastic process and it's really interesting that you emphasize strength and capability because a read of just about any newspaper will tell you about the plethora of concerns facing businesses of every shape and size across the market. But from what you're seeing, what are some of the most pressing challenges currently facing the schemes market today? 

Simon: I think probably the key one that sticks out to me initially is the the increasing demands from compliance point of view. Um, obviously the insurance sector is subject to that and what I'm saying is schemes are not exempt from it. Um, and as a consequence of, of the market changing and the demands increasing, um, there has been some revisions from an insurer point of view as to what they want from a scheme. Some have pulled the plug, some have looked at the, the size of the gross premium that's required to, to warrant a scheme, bearing in mind the increased work. So scheme needs to be large enough to to support that. And I think that's that's the first one. It's well documented that we've got inflation at the moment and that impacts on the industry again and again schemes aren't exempt from that. So claims inflation is a key one. Um, performance could suffer as a result of increasing claims costs. And also we've got a situation where we've got limited labor forces at the moment or reduce labor forces I should say. So a claim could become more drawn out. And obviously the longer you leave it, the higher the costs will be, which could impact on the performance of a scheme. So I think a scheme has to be nimble and it has to monitor its performance very, very closely and also be able to implement agreed underwriting and pricing changes very, very swiftly. And I think that that is a real challenge. But the real topical thing within a scheme at the moment is data, data and data. It's really being data hungry data to feed insurers. Pricing models measure sales, cross sales, the demographics of a book measure, performance indicators. Are you hitting the targets, Those shared goals that I alluded to earlier? Is your book retaining to the strength that you wanted it to? It's all about data and it's all about the ability to drill down and identify patterns. I think it's fair to say that it's only now I'm working for an insurer fully realized why our schemes when I was a broker were so successful and that we could compete against major composites where we didn't have the strength of the resources of the major composite. And it's because we could provide really detailed data to our insurers. They could have a look at it, analyze it, and then we could change our systems very, very quickly. So I think that's a real challenge. Now, if you're looking at a scheme as a broker, be prepared to make sure your systems can capture data and you can respond to that. What the data is telling you, working with your partner. And to do that you need technology. And a big challenge in the insurance sector, but particularly in schemes, is using systems to gain efficiencies, widened distribution with the the expansion of quote engines on the web and feed the the data needs that I've alluded to and implement change very, very swiftly. And then I highlighted it, I think, in the in the 4D process. And that's not sitting still or resting on your laurels with regard to to a scheme. And I think that is, that can be a danger. Um, the scheme has to continuously evolve and to do that you've got to continuously monitor and look at that data, look at what your customers say and listen to the feedback and take it from there. So quite a bit going on at the moment. So yeah, it's a challenging marketplace. 

Mia: It certainly is. And it's really clear that Travelers works essentially hand in hand with its broker partners and with such a variety of challenges facing the market. What do you think brokers need to keep front of mind when navigating a schemes opportunity? 

Simon: Summarizing really what I've already said, I think certainly for me the big one is distribution is the is your data is your client base, is your distribution demanding a scheme? If it isn't and you're looking to go into that scheme, really focus on can you support it? Is there a shared need volume wise and have you got robust, robust distribution? Um, and can, can obviously a scheme. Basically bring the efficiencies that you want by streamlining those services. Think think distribution. Robust distribution is crucial to any successful scheme. With that, know your market and make sure you're adding value. And to do that, you need to demonstrate expertise and capability. I think for me Schemes is about that partnership bit and it's both parties choosing their partner very carefully and then it's measurement and supporting your KPIs with really good data and feedback from your customers really. So think they are key to keeping, you know, a scheme live but also navigating your way through a scheme. If you're considering a scheme opportunity, bear those all in mind. Um, as I've alluded to previously, it's only now really that I know what makes a successful broker. So this interview has been good. It's been a real reflection process for me and I think two years in the difference between a broker lens and insurer lens is it's probably as a broker, you go to the market with, um, with your opportunity, you've obviously demonstrated your expertise. You want to demonstrate your capability to any insurer partner and obviously performance. And as a broker you do, you do definitely hang your hat on historic performance. Hopefully that's profitable. But if it isn't profitable, then what have you done in the past? What changes have been made or what was the explanation for why it was a struggle for a particular period of time? What have you done? And then and then you basically on top of that lens, you just put some growth patterns and forecasts. And and it's been amazing that since I've been an insurer, you have to look at obviously being an insurer, you have to do much more validation than than I ever expected of those pieces. Of course you validate the expertise and capability and performance because that's really as me as the member of the distribution team is what I'm doing, that's what I'm searching for. But then it's about assisting the broker with those particular shared goals. But the this, this experience I've had the, the understanding and basically the the monitoring of capability and performance is far more reaching this side of the fence than I ever, ever thought. It's obviously about exposure, but it's also about looking at worst case scenario and mitigating the possibilities of that particular occurrence occurring. So, um, yeah, it's been a real interesting journey and I think I'm in a good position to, to talk about, you know, the recipes and ingredients required to make a successful scheme. So it's been a good process for me and hopefully it is for the listeners as well. 

Mia: No, you're absolutely right. And you made a fascinating point there actually, that it's not just about day one of an insurance scheme, but also about continually navigating the markets. But for brokers looking to find out more on how to get started, how can they get in touch and discover more about Travelers Europe's schemes offering. 

Simon: Okay, I think three ways really certainly by email. So it's [email protected] and that's Travelers with one L and second one is visit our web page www.travelers.co.uk/schemes and the last opportunity or the last option is to connect with me on Linkedin. So please do that. Um, I'm always interested in meeting new people, always interested in understanding what's out there. You know, we have got an existing pipe but I talked about my new searches and we do know what we're looking for, but I like to go out and meet as many people and engage in that piece of work. And, you know, you never know what happens. Our appetite could change in future years. So please do get in touch. 

Mia: And having been on both sides of the schemes equation can imagine you're very well placed to answer a real range of questions. 

Simon: I am. Well, I think I am. But I'm lucky that in terms of um, you know, the technical capability because some, some schemes are diverse, some are are really diverse, some schemes are really technically complicated. So whilst I'm in a good position, I'm in a good position to also talk to a lot of colleagues. And I think that really has been the benefit of me being on this side of the fence is having that strength in depth. 

Mia: Fantastic. And thank you so much, Simon, for finding the time to share your insights into the current lay of the schemes landscape. It's been an absolute pleasure. 

Simon: Thank you for the opportunity. As I said, it's been a real reflection for me and I've really enjoyed it and hopefully it can be a benefit to to brokers out there. 

Mia: Absolutely. And thank you also to everybody for tuning in and look forward to welcoming you next time here on IB Talk. 

Narrator 2: Thank you for listening to this episode of IBUK talk. For more from Simon and the team at Travelers, visit them at travelers.co.uk/schemes. Thank you for listening IB talk. For the latest episodes be sure to follow us on all major listening channels.