Steve Hearn and Kieran Angelini-Hurll explain that it’s more than a rebrand – they tell Global Reinsurance how solidifying the broker’s culture has set it on the right path for the future
It had been a year since the rebranded Ed burst onto the scene, when I met Ed group chief executive Steve Hearn and Ed chief executive of treaty reinsurance Kieran Angelini-Hurll at Monte Carlo this year. While there had been a year-long journey to get to that point, by all accounts, the last 12 months have also been a whirlwind of transition for the firm.
The shift from Cooper Gay Swett & Crawford (CGSC) to Ed was more than just a name change, it was a step change in approach to (re)insurance for what has become a select cohort under the banner Ed.
In the true essence of collaboration, both Hearn and Angelini-Hurll sat with Global Reinsurance to explain how a shift in mindset has been key to forming the new Ed identity.
Hearn recalls the work it took to get to the point of relaunch last year, saying: “There was the clearing the debt through the sale of Swett and Crawford, creating cash on the balance sheet to enable us to turn the organisation around; a lot of divestment, and pulling of retail operations around the world that conflicted with our customer base; we merged some operations to take some cost out of the organisation; and brought our proposition back to a core wholesale insurance and reinsurance proposition. Tons of work was carried out by hundreds of people in the lead-up to Monte Carlo last year.
“Since then, Ed has hired 105 people, so we’re in a growth phase. That was the plan: to deploy the cash hiring talent into the organisation,” Hearn explains. “That talent hasn’t just come in London, but the majority of it has been in our London business.”
While there may have been a focus on London in the last year’s hiring, Angelini-Hurll is keen to highlight that Ed takes its international remit seriously and is proud to be “the only global independent broker”.
Angelini-Hurll says: “We are proud to be headquartered in London, but we have a global reach. We have hub offices in Singapore, Dubai and Miami; we have other offices in Beijing, Shanghai, Hong Kong, and Paris.
“We don’t place business in Singapore just because our client is in Singapore, or Dubai because our client is in Dubai; all the overseas offices work under one P&L so we’re agnostic about where we place business. Of course we’re out there to look after our clients, but they’re also out there to make sure we’re capturing that global capital that’s available.”
Hearn explains that prior to rebrand, the company was a burning platform ripe for change. “Throughout my career I have had to create the ‘burning platform’ for change. In our case, I didn’t need to. The company was right on the edge when I arrived,” he says. “With the amount of debt that the company was carrying; it’s ability to service that debt into the future; the complexity of the organisation’s structure, which competed with its customers and its own operations; plus all sorts of leakage and dilution; we had the perfect burning platform.”
He adds: “There was no choice but to change. In removing the debt and putting cash onto the balance sheet, all we would have done if we hadn’t changed is delayed the same outcome. If we had carried on doing what we were doing, which wasn’t working, then eventually that cash would have run out. This was absolutely crucial to being able to drive change.”
Angelini-Hurll outlines that the crux of that change lies in the company’s core values. Unlike the hollow words many associate with company values that are generally relegated to the realms of corporate spiel, Angelini-Hurll asserts that these values were viable guidance for the change in mindset needed for the transition to be successful.
Angelini-Hurll explains: “With Ed, the whole culture of the organisation has changed. CGSC didn’t have a clear culture because it was a merger that hadn’t really worked, so the existing talent were crying out for an opportunity to create a new culture. The employees have a real opportunity to define what is to be an Ed broker, or technician or claims person. It can’t be just Steve saying this is what you are; so it’s been a bottom up rather than just a top down approach.”
He explains that the values are brave, being brilliant, pioneering, and enriching, adding: “We were not too prescriptive with the values - they are not a list of words on the wall that people either don’t read. We have four very key cultural values that we think are important, but we don’t shout about them in that way. We talk about them, and put them into our language, so people can understand them. We try to celebrate them as well – in January we gave away a Mini Cooper car to the person who defined the cultural values the most.”
Though the pair paint a positive picture, Hearn openly points out that the change was not for everybody, saying: “Some people don’t want to go on the journey. They want to stay within a comfort zone with individuals they know and has worked with for many years. I respect that, but it wasn’t what we were going to do. We are embracing the world, and you can’t do that if you’re going to operate the old model. So people left, particularly in reinsurance, and we had to go through that period.”
Noting those who remained, Angelini-Hurll adds: “People chose to stay, and they’ve chosen to stay at Ed, not chosen to stay at CGSC. Also, people like me have chosen to join Ed. There’s lots of talent, and everybody is on the same page, on the same journey, and as Steve says if they’re not, then they’ve left. It goes back to that global P&L, it’s not just a London culture, it has to be a global theory.”
The proposition is inviting, and Hearn is not shy about Ed’s abilities to attract talent. He says: “Our competitors have done a great job creating a hiring pipeline for us. Our proposition - cash rich, debt free, clear business model, no conflict - means attracting talent is easier.”
He adds: “The greatest area of investment, economically, has been in our treaty reinsurance business. Kieran was the start of that; I’m a big believer in finding the right leader.”
Angelini-Hurll asserts that it’s not only about attracting talent, but also attracting the right talent.
“We wanted to complement the existing talent that we had, in order to build out a specialty non-marine business so as to really create a different proposition than some of our competitors. The marine and energy side of our reinsurance business also needed an injection of new talent.
“On top of this, we focussed on our actuarial and analytical teams so that we could compete with the big brokers, and be much more than any of our smaller competitors. We’ve had significant investment in our actuary and analytic capabilities, and we’ve also hired a new chief actuary, Jonathan Tilman, who joins us from Charles Taylor Managing Agency. He will be leading the charge on putting together the best in class actuarial and analytical proposition.”
“It makes economic sense to be a reflection of our customer. London’s position in the global industry has changed. The Asian market has sophistication, it has intellectual property, and it has an abundance of capital.”
Hearn is keen to note that it is not just his company that has changed, but the industry itself. He points to a need for the face of the industry to change in line with a more global industry.
“Our industry is going through a transition,” he explains. “In this industry there are still a lot of 50-year-old white Englishmen – and I’m one of them. That is the reality of the London market wholesale insurance proposition. A way of facilitating change is to look at the graduates and school leavers that we’re bringing into the industry – certainly we are in our firm.
“The types of degrees that they have, which universities they’re coming from, which qualifications they arrive with, what language skills they have, what ethnicity they are. There is a different profile coming into the organisation, and this is done deliberately, in terms of taking those decisions to try and drive a different outcome.”
Diversifying the industry isn’t just a noble cause – Hearn asserts that it makes economic sense to do so. He says: “It makes economic sense to be a reflection of our customer. London’s position in the global industry has changed. The Asian market has sophistication, it has intellectual property, and it has an abundance of capital.”
Hearn shares an anecdote that brings his statement into stark focus: “I was in China two weeks ago, meeting with an insurance intermediary who have roughly 300,000 people in their direct sales force. Currently the London insurance market employs roughly 52,000 people. When I spoke with their chief executive I asked why was I there, why did he want to talk to us. He said in a manner of terms: ‘300 or so years ago you guys invented specialty insurance; the next 300 years are ours, and you’re here to bridge that gap’.”
The need to bridge that gap is paramount from Hearn’s perspective, as it is a gap between the industry and opportunity.
Hearn adds: “For us to bridge that gap and be sustained, we need to be more than 50-year-old white Englishmen on airplanes. We can’t just take the coffee shop and parachute it in around the world and expect our business model to work.”
“At Ed, we want to attract people who speak the languages, who look like the customer, who understand how to communicate with the customer in a very different way than we do today,” explains Hearn. “That person is tech-savvy, but they may come out of the marketing world, not necessarily the science world.”
He warns: “The world has changed, and one of the damning things is if we don’t get our skates on, the London insurance market will have missed its opportunity. We’re trading very effectively with North America, Scandinavia, Canada, South Africa, Australia, New Zealand. There’s certainly business there and continues to be business there, but the world is changing. We need to create a different workforce if we’re going to take advantage of that opportunity.”
Angelini-Hurll supports this sentiment adding: “Part of the reason why Steve employed me was because I have a background in Asia; I lived and worked in Singapore for over five years, I then ran the Middle East and North Africa operation. We are very very passionate about making sure we’re a global business with real strength in those areas.”
The pair not only challenge the London Market on its slow pace to seizing opportunities in emerging markets, but also on its uptake of technology. Angelini-Hurll highlights Ed’s launch of its new digital offering.
“Our new trading and processing platform is called TradeEd. We believe that this will transform, not only the broking community, but also the insurance market.”
The iPhone app, which uses real-time data, facilitates significant cost savings, Angelini-Hurll explains: “We want to take cost out by using tech. Every other industry in the world uses tech, we need to use it better - and maybe off the back of significant losses, people will be forced to use tech. But we want to the at the cutting edge, in front of the competition, and that’s what we believe TradeEd will do.”
Hearn adds: “We own it, and it takes quotes, submits and binds data, from carriers, and from us and our customers to carriers, and the proposition is to do it live, real-time, so all of our energy brokers around the world have access to all of this data, all the time live on their system, and who through that, take cost out of the transaction.
“It costs a lot of money for people to wander up and down Lime Street with dead cows under their arms full of bits of paper, so that underwriters can put a rubber stamp and a scratch on a piece of paper. This app enables cost to be taken out of that process. Our industry hasn’t quite been able to do that yet; we think we can.”
Hearn expresses that though change is challenging, he is ultimately an advocate of London, and that the two are not mutually exclusive: “The challenge is not many people are prepared to say the emperor has no clothes. I am an advocate of London, I started in the London insurance market, I’ve never worked anywhere else; I want London to succeed, but it’s not going to succeed peddling a 325 year old business model. We have to recognise the change that’s happening in the world and define our role within it, which will involve innovation.”
Hearn’s vision is infectious, and it’s not hard to see that he has an alternative view on the industry - likely from his past within primary. His vision, paired with the insights of his leadership team - including Angelini-Hurll - has led to a blurring of the lines between insurance and reinsurance.
Hearn believes this is for the better: “As an industry the clear demarcations that were there historically have or are collapsing. Capital is fighting its way to the customer; you’re seeing intermediaries doing things underwriters did; underwriters doing things intermediaries did; and a lot of people talk about disintermediation. We can have a debate about what’s being disintermediated, but I think the clear delineation that existed is perhaps less apparent than it was.”
“With Ed, the whole culture of the organisation has changed. CGSC didn’t have a clear culture because it was a merger that hadn’t really worked, so the existing talent were crying out for an opportunity to create a new culture.”
Ed is not the first time Hearn has injected his primary acumen into a reinsurance broker. Hearn explains he was able to identify blind spots and opportunities whilst at Willis Re:
“I spent my entire career as an insurance guy - aviation, life & pensions, all sorts of different things along the way. When I was asked me to become the chief executive of Willis Re, I had never run a treaty operation before. I arrived into a treaty world with a primary view. Willis Re didn’t need another treaty reinsurance broker; I brought a different perspective.
“At the time, a huge proportion of our investment was going into analytics. I quite quickly stumbled on something that had huge application to the primary business, that wasn’t being used at all. We took the analytics piece and made it a corporate function rather than just embedded in the operation - this was a Willis thing not a Willis Re thing. This was the beginnings of the ‘blurring’.”
And the blurring continues at Ed, where Hearn strongly encourages collaboration between the insurance and reinsurance teams.
“At 8.30am every Monday morning, my two heads of insurance and my head of treaty reinsurance all sit at the same management table – my table. They have global responsibility for our organisation, they sit together as peers around that table. We have clients, which are clients of our treaty reinsurance operation and our insurance businesses. We work together as an organisation and bring that talent together.”
“It’s the ability to bring the customer an holistic view. We’re big enough to be credible in doing that - top ten Lloyd’s broker, so not a startup; but we’re small enough that I can have the leadership team sit around the same table every Monday morning. Find me another global reinsurance broker that has their management team sitting around the same table with their insurance team once a week - there isn’t one,” Hearn asserts.
Angelini-Hurll explains: “Steve restructured into three super divisions: one super reinsurance division; marine, energy, construction insurance; and specialty insurance. There is a chief executive for each division.”
Hearn says: “Those worlds are colliding as we go through this fungible capital, and technology, and changing customers, and collapsing value chains. That’s why I want our team sitting around the same table. There’s a lot they can bring to each other’s worlds. It’s far less divided than historically it was.”