WTW’s ambition is to be Asia’s best specialty broker, risk advisor and client partner, Luke Ware, regional head of corporate risk and broking, told InsuranceAsia News.
This is why the broker has been investing in specialty expertise, talent and product development, and is looking to launch new practice groups across the region, likely around industries like TMT (technology, media and telecoms) and food and beverage, in addition to its Singapore-based real estate industry practice group led by Ben McCarthy and a renewable energy business led by Sam Liu.
“Having an industry focus and being more specialist is important”
Luke Ware | Head of Corporate Risk & Broking Asia, WTW
“Having an industry focus and being more specialist is important. This is because of the complex risk landscape that our clients are now working in, having to deal with challenges like geopolitical risks, climate, Al, inflationary pressures, and the need for deeper specialty insights,” Ware said.
Risk and analytical tools help the broker develop its specialist expertise and quantify property, cyber and climate risks.
The logic behind the data focus is that risk solutions need to be tailored depending on geography, balance sheet, size of organisation, financial data, and information on the loss expectancy, severity and frequency.
According to Ware, while historically insights were reactive and relied on benchmarking and industry peers' backward-looking data, now data and analytics help create more strategic forward-looking conversations around frequency and severity of loss and risk transfer options, including captives, alternative risk transfer or structured solutions.
“We want to be able to use data to predict future risk rather than rely on what happened in the past,” he said.
“Companies are recognising that the world is becoming increasingly interconnected, there is unpredictability of risk because of climate change and new emerging risks like cyber with the frequency of events occurring at a greater propensity,” Ware said.
He added that inflationary pressures and the cost of business are forcing clients to consider how they use the strength of a balance sheet to optimise and retain risk capital and how data and analytics can support these decisions.
“Coal providers have to look at how they need to differentiate now versus how they’ve procured insurance in the past. This is because capacity is scarce, costs are increasing, and they no longer can just buy insurance on a yearly transaction basis for the next 25 years as this is not sustainable,” Ware said.
Other ways of optimising clients’ outcomes include using parametric and alternative risk transfer, especially for climate risks, that the broker provides through Asia Pacific climate risk centre in Singapore.
“There is a massive incentive for clients to invest in risk management and there’s a real importance for brokers and intermediaries to be able to articulate the risk management philosophies that underpin the client,” Ware said.
The ability to differentiate and articulate strong risk management is providing significant rewards in the new soft market cycle while not doing so means clients do not see the same reductions even in the soft market, he said.
While the placement function will remain largely in Singapore and Hong Kong, the broker is planning to build specialty businesses in different countries to be closer to the decision-makers.
“We have teams who understand local dynamics, culture, language and regulations and work seamlessly with our placement hubs in Singapore.”
Luke Ware | Head of Corporate Risk & Broking Asia, WTW
“We have teams who understand local dynamics, culture, language and regulations and at the same time work seamlessly with our placement hubs in Singapore,” Ware said.
“Markets like China and Korea are very competitive. If you’re placing property risk in Korea, it’s going to be more competitive than if you’re placing that same risk into the Singapore market. We can’t just rely on Singapore as a hub for specialty, we need to also build that in other markets. Particularly across Asia, where you see a variance in capital pricing, we would need to have a balanced portfolio of how we trade,” he said.
The idea is to build out the industry piece for large multinational clients that buy multiple types of coverage.
Last year, the broker hired more than 180 people for its specialty expansion across the region out of 800 people in the insurance broking business in Asia and 11,000 employees in the region overall.
India is a key focus for the broker that has integrated its joint venture WTW India over the last 24 months and is developing a core specialty business in India
“We’re seeing rapid growth in that business as India is one of the fastest-growing economies that has the largest population in the world and is a significantly underpenetrated insurance market,” Ware said.
While many brokers, including Aon and Lockton, have recently been expanding in the country, Ware claimed that WTW’s proposition in India is different because of “specialisation and risk and analytics capabilities”.
“Clients value beyond just the transaction of insurance, they value long-term strategic discussions and want to optimise the way they purchase insurance,” he said.
Japan is another market of interest as it is becoming more open for brokers and the Japanese clients’ risk maturity is improving.
“Companies there haven’t had a lot of in-house risk managers and insurance has been typically procured through finance and not as risk-led as in some other markets. Therefore, we’re seeing a lot of activities in Japan and that would be one of the fastest growing markets for us,” Ware said.
The broker is also planningto continue its subregional specialty built out in the underpenetrated South-East Asian market that is seeing a lot of capital inflow from Japan, Korea and China.
“We see beyond double-digit growth as being very achievable in this market. That is a combination of organic growth and inorganic opportunities, particularly to boost our specialty presence and to build scale in certain markets,” Ware said.
Inorganic opportunities would likely come from underpenetrated markets or if there’s a significant opportunity to gain scale in that market.
According to Ware, the broker wants to remain agile, more responsive and flexible despite its size: “Scale is important, but it is not a determining factor in what we want to be. What we’re more focused on is around specialisation.”
This article was first published in the InsuranceAsia News on 19 June 2024
