Adam Beckett’s (pictured) attestation that “the personal lines broking market is as healthy as it’s been for a very long time” is fittingly reflected in Ageas UK’s strapline – a call to the market to “grow personal lines, together”. Speaking with Insurance Business, the chief distribution officer highlighted that over the past couple of years, Ageas has – and will continue to - “supercharge” its focus on the personal lines market.
“That strategy is an absolute reflect of our focus on distribution through intermediaries,” he said. “We fundamentally believe in the power of the intermediary. And I think it’s fair to say that despite so much change in the market over many years, they’ve shown that entrepreneurial streak of being able to adapt and develop and grow.
“And that’s no different today, even after the tumult of the last year in the market, which was probably the most extraordinary year I’ve seen in 25 years in this industry. But intermediaries have continued to go from strength to our strength, and so our strategy is absolutely focused on backing intermediation in the personal lines market - from the smallest, high-street, offline broker to the big online aggregator-distributing brokers and then on to the affinities.”
Digging into Ageas’ strategy, Beckett noted that the insurer has focused on building out its depth of distribution because it recognises the critical role each of these players has in forming today’s strong personal lines distribution marketplace. For instance, he said, Ageas’ Broker Connect video account management team enables it to work with a significant volume of high-quality regional brokers and benefit from their great customer relationships and retention performance.
“Our Broker Connect team has spoken to over a third of the regional brokers we work with since September last year,” he said. “So, we’ve activated more than 275 additional product activations which have allowed us to open up new distribution opportunities, which, for us, means more volume and growth and, for the broker, means more choice for their consumer.”
Underpinning this growth is Ageas’ strategic focus on the expertise of its account management teams. This means the company has specialists who understand the regional and offline broker market inside out, he said, as well as those who understand the aggregator space and the brokers who distribute there, and the middle-tier of medium-sized brokers who often specialise in quite niche areas.
While Beckett firmly believes the intermediated landscape is as “healthy and buoyant as ever”, he highlighted that capitalising on these conditions to leverage material growth takes real investment and focus. And a core reason why Ageas chose to divest its commercial lines business and zero in on personal lines, he said, is because it understands that, “what you do today in this marketplace won’t be enough tomorrow.”
“So, continual development and investment in capability is really important,” he said. “It’s one thing to have really strong account management and a focus on brokers but that’s got to be backed by leading technical insurance capabilities, particularly in underwriting, pricing, claims management and fraud – the engine room of managing a good insurance business.”
With that in mind, he said, Ageas has invested significantly in sophisticated real-time pricing, putting brokers in an even stronger position to compete in a competitive marketplace populated by several big direct writers of personal lines insurance.
The insurer has seen its conversion rates increase by about 17% since those models were implemented, a figure he expects to see continue to rise. But even more crucially, Beckett said, the investment has allowed it to broaden its footprint, cover more risks and compete in new market segments – delivering a better value offering for the broker and allowing Ageas to invest further in sustainable pricing.
“One of the characteristics of the market from last year to this year is that we’ve seen an awful lot of inflation,” he said. “That’s two-fold, with cost-of-living pressures on the pound in everyone’s pocket but we’ve also seen it in terms of inflation coming through on household and motor business. [At Ageas], we took a strategy last year to rate earlier than a number of our competitors did in the market.
“And that caused some pain for us last year, we saw some volume impact that was evident in our results. But it’s also meant that we’re better funded this year than last year. So, we haven’t had to put quite the same level of increases through, we haven’t shocked our brokers and we haven’t had to withdraw capacity.”
The ripple effect of shocks in rates creates shocks to brokers’ businesses and their customer relationships, he said, and so Ageas’ pricing remaining stable has helped solidify the business. The value of that has fed through both in terms of both new business generated sales and, perhaps more importantly, in its share of market retention.
Beckett highlighted that Ageas’ investments in its pricing and underwriting sophistication and the digitisation of its claims capabilities are underscored by the very best technology, and data and analytics tooling – and also by an emphasis on being low-cost. That lower cost allows Ageas to put a better net rate out into the market for the broker, he said, which in turn drives a better price for the end customer.
“We’re making significant investments in technology, re-platforming our core policy administration platform over to EIS, which will see us have a racing car of a digital, cloud-based platform that our business will run on for our broker customers and our broker relationships,” he said. “And as we do that, that will give us the step change in digital capability that means we can more dynamically produce products and pricing and underwriting.”
Ageas is also looking to effectively build a data and analytics powerhouse, he said, as it recognises that high-quality data is the “liquid gold” that makes for a strong competitive advantage. Building a central data platform centred on the value of the relationship the broker has with their customers, will create one single consistent version of the truth on data – unlocking its full potential to the benefit of brokers and their customers alike.
“That capability won’t be biased to the few brokers who write large volumes of business on the aggregators,” he said. “It will be as applicable to that other end of the community where there are many brokers not writing very much. But individually, we’ll be able to bring the power of this data all the way through the franchise of the 1,500-to-2,000 brokers that we work with.”
Touching on the market reaction to Ageas’ rejuvenated strategy, Beckett noted that the provider is enjoying a very positive period of growth this year, largely due to the early action it took on rate last year. While others in the market are having to tighten their belts on rate, he said, Ageas is seeing its panel share percentages increasing all the time – particularly as the cost-of-living crisis is causing the natural volume of search in the market to rise materially.
Great to see is that this increased growth is occurring across the board, he said, with Ageas enjoying strong results across the regions, including Northern Ireland which has seen remarkably strong growth this year. Northern Ireland is a great example of a high-quality, traditional, advice-based intermediary-centric market – and Ageas is delighted by the opportunity presented to back those same brokers.
“We’re also making sure we’re winning in spaces where the needs are slightly different,” he said. “A good example is the young driver telematics portfolio we recently launched with Collingwood which will be in excess of £10 million of premium for us over a two-to-three-year period. We’re often thought of as an insurer catering towards the older end of the market but increasingly we’re establishing our footprint more in the young driver and connected insurance market.
“So all those things are coming together for us to be able to say that, fundamentally, we can write the growth that we need to as a business and to be really successful through our personal lines intermediaries.”
