Markel’s CUO: Evangelise The Good Work Insurers Do
Nick Line, Markel International’s chief underwriting officer, explains Markel’s smart approach to systemic risk, and the business’ focus on growing in the right places, with access to a diverse talent pool.
Last year, Line wrote a paper on strategies for mitigating systemic risk. “It’s one of the most crucial areas for us to manage,” he explains, “Systemic risk has the potential to impact capital, liabilities, and the ability of the sector to pay claims and service customers. Addressing it is vital for insurers.”
Prior to becoming Markel International’s CUO, Line was the organisation’s chief actuary for 18 years, during which time he built the Markel International actuarial team, with responsibilities for reserving, pricing, capital modelling, and catastrophe management.
On systemic risk, Line has also sought to equip his teams for success. With the lessons learned during COVID-19, Markel International launched a systemic risk training programme for its entire underwriting operation.
Line says that the culture of risk mitigation at Markel was strong already, but “we wanted to make sure that if people were worried about a specific business scenario, they could put their hand up and share that concern, safe in the knowledge that the message would be positively received.”
Thanks to the work Markel has done to improve this culture, he is confident that every underwriter in the business spends time thinking about systemic risk, and that when a concern needs to be escalated, the right processes have been put in place to allow this to happen smoothly. “Perfecting this culture is crucial for us,” he explains, “it’s our USP at Markel. We believe in high levels of empowerment for our underwriters and so, if properly equipped, they are the best people to assess the risks that we face.”
Sometimes I think Lloyd's is a bit like Gringotts and I bet most Londoners don’t really know what goes on inside; it’s a secret kind of place but there’s some sort of magic going on inside. But if people could understand what goes on, they’d realise that it’s a key component of the global economy and also makes a great contribution to the UK economy as well.
Growth from the Right Place
Markel International is in the middle of an ambitious growth programme that will see the size of the insurance business double between 2020 and 2025. The question of where this growth should come from has been an interesting one for Line. “Clearly, there’s always an opportunity to package coverages together and meet new customer needs,” he says, highlighting renewables and fintech as new markets that he believes have high potential for growth.
While it might be tempting for a company like Markel to look at new geographical markets as well as new product lines, Line believes this would be counterproductive. “We’re very happy with where we are, in the London Market, regionally in the UK, as well as in Europe, Canada, the US and Asia. We’ve looked at other countries over the years – one of the great things about having a long-standing management team is that institutional memory,” he explains. “We’re not going to go mad and do lots of new things in lots of new places, because we’ve seen that that doesn’t always end well.”
Ultimately though, Line believes that the biggest opportunity for growth will come from maintaining the company’s strong market reputation. “Markel has a great history, a great pedigree, and a great name in the market for honesty and integrity - we are genuinely nice people to deal with. We want to charge the right price for our product, but we also believe in long-term partnerships that are mutually beneficial.”
Problem-Solving Through Diversity
Line is also head sponsor for Markel International’s diversity and inclusion pillar, and sits on Markel’s global diversity and inclusion steering committee. In these roles, he helps set the strategic direction for Markel’s diversity and inclusion (D&I) efforts, which includes defining Markel’s D&I goals and policies, communicating Markel’s D&I vision, sponsoring employee resource groups, and equipping leaders to champion Markel’s D&I initiatives.
“Growing up,” explains Line, “I was very lucky. I had a great deal of opportunities that I recognise many other people don’t get. Anyone walking into Lloyd’s in the late 90s, would have assumed that only white men could do insurance! We’ve come such a long way since then, but there’s so much further to go to bring complete diversity into our industry.”
Line believes firmly that Markel, and indeed the wider insurance industry, needs access to a diverse talent pool. “The challenges that we deal with as an organisation need a broad set of minds to solve them. We don’t have all the answers right now, but the more minds we can bring in that were formed in different places, the better chance we have of finding them. If we can’t convince a more diverse group of people to apply for jobs with us, then we’re missing a trick.”
Line explains that he’s participated in a wide range of initiatives over the years to improve recruitment from under-represented groups, but for him, the element that is still missing is a joined up approach by the industry as a whole. “I used to teach maths for half-an-hour a week to two eight-year-olds as part of the Lloyd’s Community Programme over in East London. They really were brilliant kids, but I have no idea where they are now. Are they thinking about university? Are they applying for jobs in the City, in insurance?
Evangelising the Work Insurance Does
The secret to getting people excited about a career in insurance may lay in sharing the important role it plays in society, Line suggests.
“From ships in the Baltic, centuries ago, to wind farms now, nothing happens in today’s economy without insurance,” Line elaborates, “When I share these examples with early careers candidates, their eyes light up.”
The industry can look complex and confusing from the outside, he says. “Sometimes I think Lloyd's is a bit like Gringotts and I bet most Londoners don’t really know what goes on inside; it’s a secret kind of place but there’s some sort of magic going on inside. But if people could understand what goes on, they’d realise that it’s a key component of the global economy and also makes a great contribution to the UK economy as well. But of course these comments apply to the global insurance industry and increasingly this means other commercial insurance centres such as Singapore, Mumbai and Dubai. That’s why we are investing heavily in our presence there too.”
The Insurance Market Continues to Evolve
Line said he expects insurers to continue to evolve in how they handle data, how they interact with clients and other industry stakeholders. He also expects a continued emphasis on taking a lead on risk management and post-loss support.
“Cyber is the poster-child for this. We use technology to underwrite by assessing a customer’s cyber-hygiene, then we use the same technology to continuously assess their cyber exposure and advise them on minimising it. If they do have a loss, we have a myriad of services that help them get back up and running again. I believe more and more insurance products will operate like this and this ecosystem will be a key part of the offering of industry leaders.”
Markel likes to take that leadership role, he said. “It means that all the work the leader does doesn't get replicated. It doesn't get done 20 times -- no recoding, keying in, not doing 20 sanctions checks. The broker isn't wandering around the Lloyd’s building with a suitcase of paperwork – and even the virtual equivalent of that, over Zoom, is costly and wasteful.”
In turn, it will mean a better service, better data capture and “a better offering for the customer because we can get the right price for the right risk,” Line said. “We’re working on how those jigsaw pieces of risk and capital come together. It’s fascinating. One of those things where you want your career to go on and on because you want to see how it all turns out,“ he concluded.