Russell Brown – Lead Liability Underwriter, MX Commercial

How do you stay updated on industry trends and ensure compliance with changing regulations and market conditions?

So, this ties in with the answer I gave earlier about how I’m enjoying my new role and how no longer being responsible for compliance enables me to underwrite. We’re fortunate that SRG has a really proactive and competent compliance department. Part of them doing their job successfully is ensuring that the staff at the coalface, generating income, are protected from any unnecessary regulatory noise. We are told as much as we need to be told, what to do and when to do it. For that reason, we don’t necessarily need to stay up to date in terms of third parties giving us information on compliance and regulations. This generally sits with SRG’s compliance department who give us the necessary information and instructions we need.

When it comes to market trends, that is down to us, and as a team of underwriters, we have a real sharing culture in the office. So, whether it’s negative or positive, as soon as we spot an emerging trend, we’ll try to act on it. That’s how we identify underwriting opportunities and threats, and hopefully stay ahead of the competition.

In your experience, how has inflation, driven by Brexit, COVID-19, and conflicts in the East for example, impacted the Liability insurance market?

During the last 25 years, inflation has been quite predictable and steady but whilst the inflation we’ve seen over the last 18 months is not new, it’s new to some. Those under the age of 30 will not be familiar with the current levels of inflation, and when it does happen, the impact on the insurance sector is very broad, affecting almost every aspect of the market.

Clients can see premiums increase at above the level of inflation. They will also be advised by their brokers and third parties that their limits of indemnity or Sums Insured are now inadequate and need to be reviewed. However, the deeper and more complex impacts of inflation are seen by the insurer rather than the policyholder.

Long-tail classes of insurance such as Employers and Public Liability are significantly impacted. The claims cost increases hitting the market have not been priced into policies that were written two or three years ago – these are the policies now being called upon to pay claims. In some cases, these claims can be quite large and inflation pushes costs up to levels which, under some models, were not envisaged when rates were set for those policies. This puts real pressure on underwriting results. Insurers can have similar pressure on their investment returns during periods of high inflation. So for insurers, it’s all negative, and can be extremely challenging.

How do you establish and maintain strong relationships with brokers and policyholders?

As a business, we rarely engage with policyholders. In the main, it’s our brokers who we build our relationships with. Of course, the easy way to do this is to provide cheap premiums – that’s a quick route to getting brokers’ attention! However, it’s not a sustainable long-term strategy. The best way to build strong, long-term relationships with brokers is to offer a good service, good technical advice, and products that provide value to policyholders consistently, year after year. There’s no effective shortcut.

Face to face meetings are another way of building relationships, but these must be backed up by competent underwriting and a good service. Yes, you can pick up the phone and have a conversation, but there’s no better way to build a relationship than face-to-face. However, you need to offer something other than a bright smile when you come calling. It’s got to be backed up by consistent service and good technical knowledge.

It’s rewarding when you get to the stage where brokers will ring you up for advice on a situation. There is usually an apology as they don’t want a quote, but I don’t mind, because it’s nice when someone just needs to ‘run something by you’. It’s a sign that they trust your judgment and respect your opinion.

Do you get many referrals from brokers this way?

Yes, absolutely, and it’s happening more and more often since we’ve been part of SRG. We are benefiting from the relationships that SRG have with a significant number of brokers. We also have a new Business Development Underwriter, Michael Fragnito, whose role is purely to fly our flag.  He is doing a great job with our brokers to ensure those individuals who have never dealt with us before know all about MX Commercial.

With your underwriting knowledge and senior experience, how does MX Commercial balance the need to underwrite profitable business with the company’s risk appetite?

I think the answer is in the question. Our risk appetite is driven by profitable business. While we need to provide a good service and be technically knowledgeable, our primary goal is to underwrite profitably for our carriers, otherwise we have no business. Part of achieving that underwriting profitability is our risk appetite, which is driven by what we know is profitable business. We therefore use our data to identify where to focus our resources – we’ve worked like this for many years, and it’s what we’re good at, so we stick to it.

What are your hopes and expectations for the Liability insurance market in 2024?

I’m hoping that 2024 will bring stability. Whether it be COVID or inflation, the past three years have been a rollercoaster. We are very well positioned with continuity of staff and investment in our systems to make 2024 a real success.

Finally, what’s your favourite thing about your job at MX Commercial, and being part of SRG?

That’s an easy question – it’s hands down the people I work with. Simple.

The majority of the team have been with us for over 10 years or more. 18 years is the longest – well done Pippa! With over half of our workforce with 10 years at the business, it shows that we must be doing something right.

The great thing is that I can’t see this changing under the stewardship of SRG. As an organisation there is a real focus on being a good employer. I’m certainly looking forward to the next 20 years!

Find out more about our MX Commercial’s Liability solutions here.