Over the last decade, Ben Walter has amassed diverse experience across the financial services, from working as a consultant for The Boston Consulting Group to serving as chief of staff for the COO of Barclays Global Investors. When he decided to make the move into insurance, it was entirely based on his experience with
Hiscox.
“I had never considered the insurance industry before,” he says. “When I met the team at Hiscox, I was particularly blown away by two things: one, how interesting specialty insurance was as a sector of financial services, and second, how differentiated and special the culture was in the business model of Hiscox.”
The opportunity to be part of a business that was new and growing cemented the deal for Walter, and he became COO of Hiscox Group in 2011. Just 12 months later, he took the reins as CEO of its US division, Hiscox USA. According to the company’s strategic report for 2016, Hiscox USA delivered growth of 30% between 2015 and 2016.
“Growing and scaling this business in a way that I think is economically sustainable for the long term and delivers real shareholder value [is something] I’m very proud of,” Walter says. “I think that’s always been the goal, and that’s what we’ve been able to achieve.”
Walter believes there are a few things that distinguish Hiscox from its competitors. “We bring Lloyd’s-style specialty underwriting – meaning creative, innovative, solution-oriented underwriting – onshore to the States,” he says. “We do it with a model that is not only high-touch and high-service, but also tailored to the customer segments we serve, both with respect to the industry they’re in and the size they are, which is a very important segmentation factor. A 10-person company is looking for something very different than a thousand-person company, just like a manufacturer is looking for something different than a professional services firm.
We deliver that service to our key distribution partners and clients with an emphasis on speed and quality.”
Another important differentiating factor is the fact that Hiscox takes the claims process very seriously.
“We have a saying around here: ‘If it’s gray, we pay,’” Walter says. “If it’s not covered, it’s not covered. But if it’s not clear, we are on the side of the customer, because that’s what they’re buying – a promise to pay – and we take that promise seriously. We try to have anybody who has a claim, who’s going through a bad experience, have a great experience with us.”
The hurdles
As discussion turns to industry challenges, Walter mentions how insurance has been slow to become digitally literate.
“In a world where every other industry has become digital at a much faster pace, I think the industry has been slow,” he says. “I think embracing new distribution models, new ways of trading, [and] new ways of interacting with customers [and] brokers … is what we can do to solve it, but I think that’s a huge challenge for the industry.”
Walter also touches on other challenges insurance is currently facing, including the shortfall of young talent and the sourcing of capital.
“The industry is still trying to figure out how to efficiently and effectively blend different sources of capital, which might have different return hurdles, into the riskbearing marketplace,” he says. “That will be solved by continual experimentation and, frankly, a Darwinian competition.” And then there’s the issue of underinsurance.
“There are plenty of coverages out there that aren’t bought,” Walter says. “I think it’s because the industry doesn’t necessarily do the best job at telegraphing why coverage is valuable and how it can make our economy run more smoothly.
“Small business is chronically underinsured,” he continues, “and frankly, small businesses are the ones that really need insurance. There are plenty of small businesses that don’t have a basic general liability or BOP policy. We’re talking about coverages that have existed for 50 years – that are very well tailored to the segment – that just aren’t bought.”
Times ahead
In terms of the emerging risk landscape, Walter says what interests him most is the significant shift that’s currently happening in the workforce.
“We insure an increasing number of, broadly speaking, gig economy workers, and that is fundamentally changing the relationship between supplier and buyer, between employee and employer,” he says. “Despite legal and legislative efforts to try to minimize that shift, it’s happening and it’s inevitable, and I think coming up with new, innovative coverages that respond to the way people work and the way that companies buy their services today is a huge opportunity.”
So what steps is Hiscox taking to prepare for tomorrow’s insurance industry?
“Despite the fact that our US business is only 10 years old, we are starting a process to rip out all of our core technology and replace it,” Walter says. “We are relatively modern for an insurance company – we’re 100% paperless, our workflow is all electronic, yet to keep up with what’s happening in the marketplace, we’re taking what we’ve got and we’re ripping it up and we’re rebuilding it so that it’s scalable, it’s cyber-secure, [and] it can deliver change at a faster pace for a lower cost. That’s a scary but, I think, important thing to do.”
