Ahead of his keynote address at Marine Insurance Asia this week, Client Development Director, Mike Davies discusses what to expect from his presentation, his career to date, the opportunities within the Asia insurance market, and what he gets up to in his spare time. Read on to find out more.
1. What are the key challenges facing the Asian market right now?
Due to the well-publicised global marine losses over the last decade, reinsurance rates and premiums are increasing and for domestic Asian insurance companies, they are having to adjust their primary rates to manage the increases. Most brokers and underwriters have not experienced such a hardening market before and need to learn new skills to manage customer expectations. Additionally, many Asia insurance regulators are mandating higher local retentions which require companies to increase capital and also strengthen underwriting teams as they can no longer rely on sending risks to international reinsurers.
From a loss point of view, natural catastrophes are very prevalent within Asia e.g., earthquakes, tsunamis, and massive typhoons as big as the ones on the Gulf of Mexico. However, they don’t get globally publicised. Third-world countries like the Philippines have very low insurance penetration, so catastrophes do not result in major insurance loss events and accordingly, there are fewer headlines.
2. What opportunities do you see within Asia?
Asia represents the largest, fastest-growing continental economy in the world and the insurance market continues to increase its share of the global marine business through our hubs in Singapore, Hong Kong and Shanghai. The opportunities for us are massive when it comes to working with domestic insurers. Historically international insurers and reinsurers have come to Asia to compete with local insurers for ‘rich pickings’ which has alienated a lot of local companies. The global companies saw the profits that were being made locally by the domestic insurers and thought they could just clean up however this has not been the case.
Local companies are very savvy and only reinsure the risk they don’t want. Relationships in some instances haven’t been great for local companies and international reinsurers. However, at Concirrus we are not looking to take business away but add to it. Quest can provide a more scientific, data-driven approach that can help restore profitability and access new opportunities.
We’re always going to need underwriters to make decisions and to design the portfolio. From experience as an underwriter, only 20 to 30 percent of our work is underwriting and the rest is mostly operational and administrative. This can be frustrating. Covid-19 has brought about a huge increase in the use of electronic submissions methods such as email. The hardening market is driving brokers to add more underwriters to each submission. This has led to an overwhelming number of submissions to assess per underwriter. This is where solutions like our submission’s module can be hugely beneficial. Platform integration helps deliver a seamless transition from receipt of email submissions to written policies.
3. How can technology help realise those opportunities?
Asian companies and individuals are very tech-savvy but their pricing tools, asset accumulation management, and catastrophe modelling are relatively basic. So, offering a sophisticated platform like Quest will not only resonate with the individuals who are using them but help solve a lot of their portfolio management challenges. Asian companies and people are very forward-thinking when it comes to technology. The Singapore government are also very committed to digital transformation and have invested a huge amount of money in tech by giving out grants to companies to foster innovation.
If I look outside my window from where I live, I can see one of the main tech centres of Singapore. It’s like a mini Silicon Valley where a large number of tech companies are based.
4. You will be delivering the Keynote Address ‘'Digitalisation: Leading Marine Insurance Practitioners Accelerate Transformation 'on day 2 of Marine Insurance Asia. What can we expect from the presentation?
I am excited to be taking part in the Marine Insurance Asia conference, representing team Concirrus. I will be covering the current developments within the market while going into more detail about our solutions and the very exciting future developments in our roadmap. I will also be including some thought leadership on the recent grounding of the Ever Given and the largest marine loss ever – Super Storm Sandy.
With my presentation style, I like to be as inclusive as possible. English is not the first language of the majority of people in Asia so I will deliver the key messaging in plain English using inclusive language. The benefit of having these events online is that we can reach a wider audience and talk to more people about how marine digitalisation can lead to increased profitability, operational efficiency and more.
Client Development Director, Oliver Miloschewsky will be moderating the roundtable discussion later in the day on 'How will the Marine Ecosystem be Impacted by Digital Insurance?' where we will be discussing these issues further with other experts within the marine insurance market.
5. With the experience you have, what does the future of the Asian market look like to you?
Very exciting! Asian markets are retaining far more business and are also repatriating business that has previously been placed overseas. We have seen significant growth in premiums because Asian insurers are realising that they no longer have to ‘give away’ their business to overseas markets. They have the knowledge, experience, and capacity locally to underwrite the largest most challenging risks. There are also the practical and cultural benefits that placing business within Asia offers. e.g., if you place Japanese business in Singapore there’s only a one-hour time difference compared to an eight-hour time difference in London.
Local governments are now also seeing the opportunities within this space and are supporting universities and colleges by developing degrees and vocational courses in marine insurance which will help increase the number of graduates moving into the industry.
6. Tell us a bit about yourself…
I was born and grew up in Liverpool in a beautiful town on the coast called Crosby. In 1996 I was 35 and this is when my life changed. My fiancé and I who was also working in insurance decided to give it all up and move to Singapore. We only had two suitcases and our accommodation hadn’t even been confirmed when we flew out. When I look back at it know it was quite brave of us. I had been offered a 12-month contract role in a local marine insurance company and luckily after the year was up Royal & Sun Alliance insurance had decided to open an office in Singapore and was looking for someone to run their marine business. This was my first substantial role in Asia. Apart from one year in Switzerland where I was fortunate enough to be the Global Head of Marine for Zurich Insurance, we have lived in Singapore ever since.
We married the year we arrived in Singapore and we will be celebrating our 25th anniversary this year. We have an 18-year-old daughter who is currently studying at Worksop College in the UK which is the school my wife went to.
My advice would be to always take on new challenges and opportunities and don’t be afraid of change as you never know where it will lead you.
7. Why marine insurance?
Growing up I had always been involved in sports and ran for England at national standard for under 18’s. I aspired to do Sports Science at Loughborough University but unfortunately, I had focussed too much on sport and not enough time on studying! So, I didn’t get the grades. Plan B was an offer from Royal Insurance in Liverpool to join a trainee marine underwriting program. At the time my main reason for accepting the job was the fact they had a great Athletic section and allowed time off for competitions. I didn’t even know what marine insurance was when I joined. Like a lot of people, I fell into something and I would never have thought 41 years later I would still be here. My progression has been a mix of luck and hard work.
Sport is still very important to me and I think it has helped me in my professional life too. Completing triathlons and marathons has given me a lot of confidence. When you’re standing up in front of 500 people presenting you think about the challenges you’ve overcome and the competitions you’ve won and think if I can do that, I can do this presentation.
8. Tell us more about your time as Chairman of the Cargo Committee at IUMI.
I have been extremely fortunate in my career to have worked with several influential people within the insurance market. When I first joined AXA in 2000, I was tasked to set up the AXA Corporate Solutions Assurance Singapore Branch and my manager at the time was Patrick de la Morinerie. Patrick served as IUMI’s president from 2003 to 2006 and he encouraged me to become part of IUMI. I was lucky enough to hold the position as Chairman of the Cargo Committee for six years as well as being part of the Executive Committee alongside, Dieter Berg, Non-Executive Director at Concirrus. IUMI allowed me to meet some great people like Dieter. Even though it involves a lot of hard work and commitment the opportunities that being part of IUMI has offered me are invaluable. Getting to travel the world is fantastic. One particularly busy year I travelled to Hong Kong, Rio de Janeiro, Toronto, and London.
9. Why did you decide to move into InsurTech?
As Chairman of the Cargo Committee at IUMI every year I would deliver a ‘State of the Market’ presentation. I found it very frustrating that as a group of professionals we couldn’t collectively readjust the market back to profitability. I knew of Concirrus as a professional partner of IUMI and had met Andy (CEO of Concirrus) several times at annual conferences. Change is needed within the market and the more I learned about the development of Concirrus and Insurtech I realised this was the answer. We now have a great opportunity to restore profitability and access new opportunities in helping underwriters manage the hardening market and transform their portfolios into a far more profitable and sustainable books of business.
10. What has been the biggest surprise about working at Concirrus so far?
The people. I have never known such a community of employees to be so supportive of each other and prepared to share their time and knowledge so openly and freely. With lots of the team based in London with the time difference, you would think several challenges would occur however if I have an issue a member of the team is only a zoom call away. It has been great to get to know the wider team and know that everyone has the same goal of success.
11. You’re based out in Singapore. What is your favourite part about living there?
Where do I start! The weather, the food, and the opportunity to travel so easily to amazing places. I have travelled to almost every country in the Asia Pacific region whether through business or on holiday and continue to be amazed by the diversity and cultural differences each country has to offer. My personal favourite is Thailand for the food and beautiful places to stay. The airport in Singapore is like no other and is the best transportation hub in all of Asia and probably the World. It offers exceptional passenger experiences with lots of leisure amenities e.g., gyms and cinemas. Sometimes you’re sorry to leave the airport!
Having spent more than 20 years in Singapore with my daughter being born here it will always have a special place in my heart.
12. What are your outside interests?
As a keen sportsman, I love triathlons. I have completed two Ironman triathlons consisting of a 2.4-mile swim, a 112-mile bicycle ride, and a marathon 26.2-mile run. One in Australia and another in the UK. I also like to compete in marathons however age is forcing me to run less and focus on shorter races i.e., 10km. I also travel as much as I can with my family and enjoy as much of the world as possible!
We’re proud to be sponsoring Marine Insurance Asia where Mike will be presenting the keynote address 'Digitalisation: Leading Marine Insurance Practitioners Accelerate Transformation'. See the agenda and register here for free.