Phil Hobbs: giving ‘the final 5%’
Throughout his career as an actuary and following his transition to the underwriting world, Liberty Specialty Markets’ Phil Hobbs has focused on going the extra mile to give the client what they want
His footballing days might be behind him, but Phil Hobbs still keeps in shape with morning runs. A veteran marathon runner, Hobbs (like many other business leaders) has had to contend with a different kind of endurance test during lockdown – the 12-hour day of Zoom/Teams calls to keep on top of his role as deputy managing director of Liberty Specialty Markets (LSM).
“I've got a bit ‘routined’ in lockdown,” he admits. However, he says, he still finds time for exercise in the morning, before sitting down to breakfast with his children at 7am. “Normally, I would have long left the house by then, so that’s a nice thing to be able to do.”
Another thing he would normally not be able to do is take half an hour off to have lunch with his wife on a weekday. “Though she may not be overly enamoured of having that every day,” he jokes.
In some respects, Hobbs is the traditional City trencherman – he loves a good steak (Goodman being a favourite venue). However, his favourite food is actually Chinese, a cuisine peculiarly scarce in the Square Mile - apart from long-standing Szechuan stalwart My Old Place on Middlesex Street. Luckily, Hobbs has a source closer to home. “My mother-in-law is Chinese. I get all the good stuff,” he confides.
One reason he might need to get back to the City however, is because the competition at home is getting too fierce. When asked what superpower he would like to benefit from, he says: “Right now I would like to be the best gamer in the world so I could beat my children.”
When you're the chief actuary, you’re providing advice rather than making the decisions. So when I moved across to underwriting, it was a very different responsibility - you're the person making decisions.
“It is very frustrating for me,” he adds. “Sometimes I'm not even allowed to play anymore!”
However, aside from some of the benefits of remote working, Hobbs, like many of his peers, misses those opportunities for a five-minute chat with a team member, following a chance encounter in the office building. Instead, he relies on his PA to find space for phone calls in his schedule once a day with one of his direct reports, enabling him to step away from the tyranny of the laptop and catch up with his team while he takes a turn around the garden.
“For most execs in our industry, they would have been spending their days talking to people, in various formats and in different places. If you do a more junior job where you sit behind a computer screen - as I might have done as a graduate actuary - then I can see how working from home might be more efficient for you, but it can be like groundhog day [for me], sat in front of the screen.”
He says that there have been some work-related upsides to the enforced home working of the past year, though.
“There have been a lot of good ideas coming up in our business. One of our people set up Liberty Virtual Rooms where you can try to recreate that office environment, so I think people have been quite innovative. But I still think on some level, the way our organisation is run, we do need to get back to some level of face-to-face [interaction] in the office in the future.”
From actuarial to underwriting
Hobbs’ career is not typical of an underwriting head at a specialty carrier, although his additional duties overseeing enterprise risk management (ERM) and actuarial at LSM hint at his professional origins.
From entering the graduate trainee programme at Bacon & Woodrow in 1999, then the largest independent actuarial consultancy in the UK, he inadvertently set a path towards his current role, having joined the non-life, general insurance team of a firm that focused predominantly on life and pensions business.
When Bacon & Woodrow merged into Deloitte in 2001, Hobbs worked his way up as an actuary to a manager role, before crossing the floor to the underwriting world. He joined LSM (then known as Liberty Syndicates) in 2006 as chief actuary and then continued in various chief actuarial roles until 2017 when he was appointed to his current position.
“When you're the chief actuary, you’re providing advice rather than making the decisions. So when I moved across to underwriting, it was a very different responsibility - you're the person making decisions,” he recalls.
If you've got a good ERM framework, you can empower locally, and that is a massive competitive advantage
Having moved from the consultancy space, where he was typically moving from company to company on secondment and taking more of a long-term, strategic view, Hobbs found himself “at the coalface of underwriting”.
“It turned out that's the part of the industry that fascinated me the most. When you're inside a company you really get to follow things through; it's your decisions and you get to see the fruits of your labour - and the errors too.”
Following his move to a more underwriting-focused role, Hobbs soon found that there were other challenges to overcome.
“There's an interesting dynamic when you transition across as the CUO. By definition, the only individual accounts that end up on your desk are the very difficult ones, and almost automatically it's because one of the other CUOs who reports to me doesn't have the underwriting authority to deal with it.”
Risk appetite and ERM
Having made the jump from a purely actuarial role to one that also encompasses underwriting, Hobbs has also had to adapt his leadership style to accommodate a different set of priorities
“There's the portfolio management piece but the most important bit is the risk appetite. Having that crystal-clear risk appetite in a very large global organisation like ours is not straightforward - if you can get that right it helps all your underwriters, your brokers, and your clients,” he says. “It also means that you're writing more of the business you like and less of the business you don't like.”
And the global nature of the role presents other challenges, Hobbs says.
“I think the hardest piece, and something I spend a lot of time thinking about, is just the communication; when you're communicating to hundreds of people. It's not just CUOs who might report to you in the different territories, you've got hundreds of underwriters out there. I spend a lot of time thinking about how to improve in that area.”
One of the tensions that inevitably arises in a global underwriting operation is the need to give local underwriters the latitude to make decisions based on their unique knowledge and experience of their territory, while ensuring that underwriting standards are maintained across the organisation.
“That comes down to very strong ERM to me,” says Hobbs. “If you've got a good ERM framework, you can empower locally, and that is a massive competitive advantage - rather than if everything has to be referred back to London or New York or wherever.”
My mind often goes back to when I was first a chief actuary. I was only 28 and maybe one of the younger chief actuaries around. I did have a few people turning up to meetings and asking if my boss was coming.
As well as getting the communications side right, Hobbs says he has had to grow as a leader in other ways.
“In terms of the industry, Liberty Specialty Markets has moved from being a very London-based organisation to most of our business being written outside of London now. That understanding of our wholesale versus our retail markets, versus reinsurance - and how that interacts globally - is something that's been hugely important over the last five years.”
“The other piece, which is not really specific to underwriting but has been a big executive leadership journey for us and for me personally, is transformation and change,” he adds.
“It feels like that, in the last few years, has suddenly got really fast. It's not something I've had lots of experience of in my career and it’s definitely an area of leadership that I had to get up to speed on - and I'm still learning about.”
Learning to become a business leader involves a number of changes – learning how to interact with and manage your direct reports, how to communicate to the wider organisation (particularly more junior colleagues), and learning to deal with senior contacts at client companies and external stakeholders.
A key part of all of this is also knowing how to deal with others’ expectations and perceptions of you.
“My mind often goes back to when I was first a chief actuary, at our Lloyd's syndicate - which was one of the biggest syndicates in the market at the time. I was only 28 and maybe one of the younger chief actuaries around,” Hobbs recalls. “I did have a few people turning up to meetings and asking if my boss was coming. You do find out that some people unfortunately do judge people by their appearance.”
This formative experience certainly seems to have driven Hobbs’ view of how the industry could improve itself with providing encouragement to rising stars looking to move into leadership roles.
“Attitudes have changed, because I think all industries change over time, but I'm not sure they've changed a huge amount,” he says. “If you look at most insurance companies' organisation charts, they look the same today as they did 20 years ago. Reporting lines are quite embedded in insurance companies.”
“I definitely think the sector could be better off getting people to think more about networks within companies rather than rigid organisation charts,” he adds. “That's a big part of the change management that's going on in our industry and we need to do that if we're going to attract the right talent going forward.”
If you think about [the organisation] more in terms of collaboration and networks, you avoid those fiefdoms that can pop up in certain companies.
Coming from the consultancy environment, Hobbs suggests it is more natural for someone with his background to think about organisations in terms of “networks and collaboration, rather than reporting lines and structure”, although he recognises that “to some people, it's the most important thing in the world who they report to.”
“If you think about it more in terms of collaboration and networks, you avoid those fiefdoms that can pop up in certain companies. I think that’s a great thing about LSM; we don't have them in our senior leadership team, and when other people join, it's an observation they make.”
Underwriting of the future
The change management aspect of his role is one thing that is at the forefront of Hobbs’ mind. He describes the move into underwriting as his greatest achievement in his career to date, even though as he admits: “It wasn't something that I particularly planned to do, these things happen sometimes.”
However, he acknowledges that it was “quite an unusual move, particularly in the London market”. Given the very hierarchical and sometimes quite siloed structure of many underwriting organisations, the challenge facing the industry is how it manages to entice the best employees from less traditional talent pools to join it at a time when the role of the underwriter is set to change radically.
“When you look at what an underwriter needs to do today, it's quite challenging,” says Hobbs. “They almost have to be good at everything. Suddenly you've got to know about data and analytics as well as your product and your distribution and the relationships you need to bring.”
Everyone can get a job done 95%, but putting in that extra 5% to really finish it off makes a huge difference when you present it.
“As we look to the future, [we need] to make sure we can give our underwriters the tools that they need to be successful.”
Part of that success story for the insurance sector as whole, will be how it maintains customer relationships, especially as other business sectors - from product manufacturers, to online retailers to tech firms – are looking to deal direct with insurance buyers to offer their own tailored policies.
For Hobbs, one of the best pieces of advice he received, early in his consulting career, was that the best partners in consulting firms are those who “really listen to the customer”.
“Not the ones who are the most technical; there were some brilliant technical actuaries but they did not make partner. The people who made partner were those who really listened and understood what their customers needed. It is common sense, but so many people overlook it,” he says.
When it comes to imparting his own wisdom to others, Hobbs is modest, describing his advice as “a more generic point, but one that is really important and anyone can do it; it's a learned behaviour”.
“It’s what I sometimes describe as ‘the final 5%’. Everyone can get a job done 95%, but putting in that extra 5% to really finish it off makes a huge difference when you present it. That extra little bit of effort takes you such a long way in terms of how that work is perceived and what might be done with it.”