Liberty Specialty Markets aims to keep ahead of market shifts by delivering consistency and building on recent successes

By Wendy Pugh

Liberty Specialty Markets in Australia has tripled in size over the past five years and now writes more than $1 billion a year in premium – all achieved while receiving broker accolades for its performance.

Market conditions and commercial decisions have supported the expansion, while Senior Vice President, Asia Pacific Ben Hissey says the business approach of US-based parent Liberty Mutual Group, which has been operating since 1912, is a key factor in growth across the region.

“As a mutual insurance company it provides a longer timeframe in terms of how you make your decisions and how you work with markets and customers,” he tells Insurance News. “You don’t have the shareholder calls every three months, six months, every year. It gives you a different runway.”

Mr Hissey has been with Liberty for more than 20 years and is a founding member of its corporate insurance operations in the region. He has moved around the world with the company, working in London and leading Asian operations while based in Singapore.

In 2018 he returned to Sydney, where his remit now encompasses oversight of Australian branch operations, program, affinity and SME business, reinsurance, marketing and a suite of specialty product lines.

He says Liberty, which started in Australia in 1999, has benefitted from a favourable environment in recent years after taking action to address emerging issues in areas such as directors’ and officers’ insurance and other financial lines.

“I think we were on to those issues pretty early, and we wanted to make sure we had our house in order. Where maybe others were still fixing or remediating books of business, it’s given us the ability to take advantage of more positive market conditions.”

About five years ago the insurer moved to introduce new specialty offerings such as trade credit, terrorism and weather-related cover, supplementing traditional corporate products and expanding its presence.

Mr Hissey says Liberty builds its capabilities by drawing on expertise from within the industries it covers. Examples have included tapping a construction engineer to work with the professional indemnity practice, providing project delivery insights. Knowledge around a product becomes part of group intelligence that’s shared in looking at the totality of a risk.

Expectations are set around how information is brought together, with underwriters gaining input from claims experts, engineers and others with relevant expertise, he says.

“We’ve been able to invest in a lot of capabilities and they all boil into an underwriting outcome that has a lot of integrity.

“We’ve got a range of resources that exist within our business that I would argue are not only unique to the region, but are probably unique globally in terms of the nature of those resources in an insurance company and how we utilise them to get to the underwriting outcomes.”

Consistency is a goal, allowing brokers and clients to manage budgets and business outcomes with a greater level of certainty.

“We never want to be caught in a situation where there’s a knee-jerk reaction, where the cover that we could provide yesterday and the price that goes with that is not necessarily there tomorrow,” Mr Hissey says. “That’s been a core tenet of what we focused on in this part of the world.”

The firm has gained recognition from brokers during a period when covid disruptions have tested relationships between intermediaries and underwriters.

Liberty was named Specialty Insurer of the Year in a newly created category at the National Insurance Brokers Association (NIBA) annual awards last October after in 2021 taking out General Insurer of the Year.

Mr Hissey says the NIBA outcomes reflect Liberty’s underwriting and claims performance and it has placed importance on maintaining service levels as the company has grown.

“Over the past few years and obviously with the challenges of the pandemic, I think teams have done a pretty amazing job in terms of delivering that consistency, delivering the service,” he says. “They’ve been focused on making sure that they answered the phone, they answered the emails, they set expectations about communication.”

Brokers voted on the awards in an online survey asking about their experiences in dealing with 12 general insurers. Liberty says it ranked first in 29 categories and was in the top three in 41 of the 42 categories.

The company has looked at the feedback in terms of its performance across the general insurance categories, with specialty a part of an overall business with a sizeable market presence.

Liberty has a role in insuring a third of Australia’s largest 2000 companies, including 81 in the ASX100, it says. Professional and financial lines are its largest product portfolio and Australian Prudential Regulation Authority data shows it’s the biggest insurer in that market.

Although often perceived as solely a large end of town corporate insurer handling complex and technical risks, it also covers SME and mid-market enterprises through agency and broker relationships.

“It’s something we are as proud of as we are the corporate segment,” Mr Hissey says. “It’s been an area where Liberty has been able to invest and become involved and maintain really long-term relationships.

“There are some challenging aspects of coverage within that, so it’s not necessarily vanilla and easy to write. But [such customers] are very much an important part of our business.”

“We don’t need to compete on price every day of the week, there are other things that are potentially more important.”

After years of a hard Australian market, pricing gains have eased in some lines, while directors’ and officers’ (D&O) premium declines have led to some industry worries about the potential for a slide to the bottom of the cycle.

Mr Hissey says Liberty has noted the market shifts but is not concerned because it has much to bring to the table in offering value beyond price. Clients also appreciate dealing with underwriting and claims staff on the ground in Australia, and the firm is delivering new products, he tells Insurance News.

“We introduced a new D&O product through 2022 which offers clients and brokers a really bespoke coverage option that aligns with their businesses, and it’s very different to what exists elsewhere in the market,” he says.

“We spent a lot of time thinking about and developing that product and we are quite proud of it.”

The insurer has also announced an additional commercial crime wording and is upgrading a transaction platform.

“Everyone can play with price, but if certain insurers can provide a different level of coverage or outcome that is valuable to a client and broker, they will recognise that,” he says.

“We don’t need to compete on price every day of the week, there are other things that are potentially more important.”

Liberty globally has indicated cyber is an area where it’s willing to deploy meaningful capacity, and a dedicated cyber team now sits within financial lines in Australia. Like other insurers in this space, Liberty is proceeding carefully.

“It’s an area that we just need to closely manage, in that it’s a very different risk profile, and developing quite quickly relative to other parts of the market,” Mr Hissey says.

“Over the past few years there’s obviously been some pretty notable claims examples or incidents that highlight the risk that goes with that, so we need to be thoughtful about that as well.”

Natural catastrophe-exposed property also remains a challenging area, particularly involving Australia and New Zealand secondary perils such as hail, bushfires and floods.

Volatile weather has continued this year with record flooding and Cyclone Gabrielle in New Zealand, and globally tougher January reinsurance renewals and natural peril portfolio changes have reflected reassessments in response to natural catastrophe trends.

“There’s been a number of remediations and alterations with companies in all parts of the world and we still keep running into surprises,” Mr Hissey says.

Liberty has been looking at pricing and the property risks amid the volatile natural perils environment.

“I think we’ve delivered a pretty fair outcome to the market, a pretty consistent outcome,” he says. “But it’s a challenge we have as a business to keep looking at that, and keep thinking about what that might look like as we move forward as well.”

The insurer continues to explore opportunities to build on its recent growth. That includes anticipating and responding to evolving risks to minimise potential surprises and deliver the consistency sought by brokers and clients.

“There are always things that we can do better,” Mr Hissey says. “We are always challenging ourselves to look around the corner a little bit more.”