Twenty over thirty

The Top 20 influencers and influences that have shaped the industry across three decades

By Terry McMullan

The Insurance News Top 20 most influential people in the industry was launched in 2009 as a one-off exercise that took on a life of its own. Along the way, we began to include “influences” along with the “influencers”, recognising that the two were often interlinked.

Now, I’ve been challenged to use the Top 20 format to list the most consequential individuals in insurance over the 33 years of my insurance career. Easy enough, I thought.

But no. The trouble is, there are way too many people who deserve a spot.

So I’ve listed the individuals who I see as influential in dealing with the wave of change that swept through the industry after 1990. Not all are heroes, but all have helped to shape what we have today.

I’ve consulted widely with industry veterans and dug deep into my dimming memory banks and the excellent Insurance News archives, but the result is nevertheless subjective.

I’m particularly grateful for the assistance of Alan Mason in compiling this list. He was at the heart of so many of the industry dramas that marked the early years of the 21st century and much that followed, and his recollections have been invaluable.

Please note, this list is not necessarily in order of importance. That would be far too difficult, if not impossible.

And going into great detail on all that I briefly discuss here would require a book-length article – and a very good libel lawyer. Space in Insurance News magazine is always limited, and the editor’s instructions as to the length of this article were very strict.

Robert Kelly plans to be a key player in the most complex broker market of all – the United States

2. Robert Kelly: determination, vision and drive

The driving force behind the formation of leading local broker group Steadfast, Robert Kelly has taken the business from a brokers’ buying group to a behemoth.

Starting in 1996 with 43 members, it now has about 420 member companies handling gross written premium of more than $13 billion.

Mr Kelly’s initially aggressive style (he’s a lot more relaxed these days) was an important factor in the company’s push to develop a unique range of services.

The most obvious one is the group’s standalone transaction platform, which is thriving despite initially strident opposition.

Today, Steadfast has spread its wings into Asia and Europe.

As the group settles down from the frenetic development pace he has set over the past 28 years, Mr Kelly plans to be a key player in the most complex broker market of all – the United States. It’s just the sort of challenge he thrives on.

3. Lach McKeough: father of Austbrokers

When Lach McKeough retired in 2013, his legacy was leading broker group Austbrokers, which has evolved to be part of the AUB Group.

At the turn of the century, Phil Shirriff, managing director of local insurer Mercantile Mutual, delegated senior manager Mr McKeough to start a company that could buy into local brokerages. The plan was to buy into, but not totally control, large brokerages with potential. They included outstanding operators such as MGA and Insurance Advisernet, whose founders really deserve their own entries in this list.

Mr McKeough built a mighty empire of brokers and underwriting agencies that have lasted a lot longer than Mercantile Mutual.

4. HIH: a house of cards brought down by hubris

In 2001, Ray Williams controlled Australia’s largest insurer, HIH. He had been building the company since 1968, initially as a workers’ compensation insurer and later through acquisitions in Australia and worldwide.

The pace of growth was swift – HIH owned 240 companies when it sank – but profits were patchy, so much so that Swiss shareholder Winterthur sold out in 1998. Alarm bells were ringing by 2000, but Williams and his management team kept acquiring as profits fell along with the share price. The company accounted for 9.3% of all gross written premium in Australia, but it wasn’t too big to fail.

Despite a late fire sale, HIH went into provisional liquidation in March 2001, owing $5.3 billion.

The fallout for the entire industry was horrendous. The federal government was forced to bail out policyholders, with liability cover losses halting sporting and community events. Williams was tried and given a jail term, along with a number of other executives and hangers-on. An embarrassing royal commission followed. It showed that insurance underpins Australian society and business, but also that prudential regulation needed to be much tougher.

5. Frank O’Halloran: mega-builder of an Australian icon

QBE is always worth watching, thanks to Mr O’Halloran’s long stint as chief executive.

It’s the record number of acquisitions during his 37 years at the insurer that linger in the memory –between 127 and 140 purchases (recollections differ) in 45 countries. While the company has since sold a significant number of those businesses as individual markets stumbled and QBE’s financial performance had worrisome moments, there’s no doubt his contribution had a positive impact on shareholders’ pockets.

When Mr O’Halloran joined in 1976 as the financial controller, QBE’s market capitalisation was about $9 million. Today, it’s close to $30 billion. Mr O’Halloran, now Steadfast chairman, is also the only Australian inducted into the Insurance Hall of Fame.

Peter E Daly was the first ICA chief to preach that you can’t hope to make insurance understandable to customers and governments while hiding behind a curtain

6. Peter E Daly: bringing insurance out of the shadows

Mr Daly enjoyed a sterling insurance career in Africa and Australia before becoming chief executive of the Insurance Council of Australia in 1991.

A gregarious networker, he was the first ICA chief to preach that you can’t hope to make insurance understandable to customers and governments while hiding behind a curtain.

Mr Daly let the light in by forming relationships with consumer group leaders, politicians, media and the public.

He pioneered the claims review system and always brought industry bosses along with him. His successors in the job had only to build on the foundations he put in place.

7. George Trumbull: AMP and caveat emptor

Mr Trumbull was an experienced American insurance executive and the most expensive CEO Australia had seen when he was recruited by AMP in 1994.

AMP, with 19,000 staff, was one of the five largest companies in the country. Mr Trumbull earned his money in the first few years revitalising AMP, including demutualising the venerable institution in 1998.

Flush with capital, AMP went shopping for a general insurer, with formerly state-owned GIO in its sights. The GIO board resisted, bringing on what Insurance News has described as “one of the bloodiest battles in Australian corporate history”.

But in January 1999, AMP won out, paying nearly $3 billion for less than 60% of the target.

Unfortunately, the deal included GIO’s reinsurance operation and some appalling long-tail, high-risk business. Within a few months, AMP was looking at a $700 million loss for GIO. Mr Trumble was fired the following August, walking away with a $13.2 million payout.

The bleeding continued with a $112 million class action payout to GIO shareholders. GIO (minus the reinsurance liability) was sold to Suncorp in 2001 for $1.26 billion. It’s been a tough road ever since for AMP.

8. Alan Mason: HIH fiasco, a smart defence, and then a code

Mr Mason was chief executive of the Insurance Council in 2001 when HIH collapsed, and he led the drive to minimise the damage that resulted.

That required some smart side-stepping when the federal government’s immediate reaction was to make the industry pay.

Mr Mason countered immediately with a politically loaded warning that the only way the industry could afford to shoulder the HIH burden was to increase everyone’s premium.

That led to the creation of a government-financed but industry-managed assistance program to cover the wide range of affected individuals, businesses, sports and community organisations. Mr Mason followed Peter Daly as the council’s chief executive, and was primarily responsible for devising the industry’s initial code of practice.

That wasn’t an easy thing to achieve, and came well before the rest of the financial services industry.

Mr Mason understood the climate that was growing in insurance – consumerism and tougher regulation. It helped the industry through a difficult period.

Richard Enthoven has built a diverse insurer that’s innovative and competitive

9. Richard Enthoven: the ‘new’ brand of insurer

Hollard Insurance might have been seen as a market disruptor, but his company, and his contribution to the local industry, have been illuminating.

The American-raised descendant of a South African insurance dynasty, Mr Enthoven built a company that continues to shine.

Now one of the five largest insurers in the Australian market, Hollard started in 1999 with a fresh sheet and no legacy systems or issues.

Mr Enthoven has leveraged that freshness to build a diverse insurer that’s innovative and competitive. It dominates many classes and follows an ethic that emphasises the importance of “expertise, integrity and humanity”. And from all accounts, it practises what it preaches.

10. Judith Cohen: holding the industry’s feet to the flames

Appointed to head up the new Insurance Inquiries and Complaints wing of the Insurance Council about 1992, Judith Cohen had already achieved more than most.

The first woman appointed to the powerful Conciliation and Arbitration Commission, Justice Cohen then spent five years showing insurers why “fair and reasonable in the circumstances” should be their guiding light in claims decisions.

The accomplished QC was a fearless and sometimes blunt advocate for consumer rights, but also took the time to understand the inner complexities of the claims process.

Her balanced decisions ensured the service would continue to receive the industry’s support and respect.

11. Brian Keane: master of brand awareness

Mr Keane, who served as CEO of AAMI from 1984 until 2002, before it became part of Suncorp, was a savvy marketer before anyone really thought of advertising as anything more than a media necessity.

Banners displaying the AAMI brand were seemingly everywhere that major sports happened.

Competing with the NRMA and RACV personal lines warriors, Mr Keane sank millions each year into getting his company’s brand in front of the public.

When he retired in 2002, AAMI was raking in more than $1 billion a year in gross written premium. To this day, nobody does it better.

12. Era of the giants

At the start of the century, no single insurance company dominated the market.

The British-based insurers that had led Australian business since the 19th century were eyeing the exits, seeking fresh opportunities and the capital to make it happen.

The undisputed market leaders today are IAG and Suncorp, which gained their bulk hoovering up those former offshoots.

Queensland-based Suncorp achieved dominance mainly through its purchase of Promina (see Mike Wilkins) and GIO, while IAG started off as NRMA Insurance and acquired UK-owned CGU and Fortis from their British parents, plus NZI’s Australian operations.

The plus was rapid growth. The minus was the challenge of bringing together cultures and a wide range of systems.

13. Rise of the regulators

At the start of the 21st century, the insurance industry was regulated by a light-touch regime with little power.

It was replaced by a “twin peaks” model: the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.

The HIH collapse and several uncomfortable royal commissions, coupled with a more consumer-conscious public, have resulted in much tighter oversight of financial services industries.

In 2002, 20 insurers were deregistered. Some were decidedly dodgy. It’s tough, but it works.

14. … and the challengers

The first decade of the century saw the arrival of what were commonly referred to as the challenger brands, most notably South African companies Auto & General (Budget Direct) and OUTsurance (Youi). Using hefty amounts of advertising, crafty market selection and smart IT and claims systems, they have proved strong competitors in the personal lines space.

The majors have moved to protect their patch with their own niche brands, and the winner is the advertising agencies.

15. Comparison sites

Why haven’t comparison sites had more impact in the Australian market?

After all, they dominate the British personal lines space. The answer: because Australian insurers saw them coming.

The traditional British high street broker, who handled everyone’s personal lines needs as well as commercial insurance, seemed to vanish overnight once those annoying meerkats (owned by Budget Direct’s owner Auto & General) took hold via vast amounts of advertising and insurers’ willingness to deal with them.

Despite similar efforts in Australia, the leading insurers kept their pricing models close to their chests because, well, the market is hotly competitive, and why would they let the comparators loose to dictate terms?

Despite occasional bleats from the comparison sites and an occasional consumer advocate, no one’s budging. Simples!

16. Tech: blessing and curse

Technology rules the insurance industry, and keen start-ups are constantly devising innovative ways to remove the humdrum from what used to be time-consuming paperwork.

But as with many industries, technology also took away some of the “people” aspects of insurance. For example, claims decisions were once made by experienced specialists who measured the details against the contract. I often hear complaints that “wriggle room” in decision-making is now severely restricted by programs that force employees to stick solely to what the screen in front of them says.

As tech gets smarter, the need for actual people to make decisions will diminish even further.

Fair enough, but how do you code the principle of “utmost good faith” into a program?

17. Climate: it took time to adjust

In 1994, I proposed that ICA should run a national conference called The Rollercoaster Climate, inviting politicians, the media and other industries to discuss the future risks of a warming world, which Munich Re in particular had extensively researched.

Sceptics on the ICA board said no. There were CEOs who didn’t believe climate change – or as we usually referred to it then, the “greenhouse effect” – was real.

Climate change costs the industry tens of billions every year.

It was a missed opportunity for the sector to take some leadership on the issue.

18. Underwriting agencies

Underwriting agencies have always been around, but in recent years they have risen dramatically in number as insurers have switched from seeing them as a minor competitor to being an ideal way to cover specialty lines.

Brokers are now keen supporters. Don’t be surprised if opportunistic capitalists with deep pockets eventually see the possibilities and start underwriting products that compete directly with the mainstream.

19. Bancassurance didn’t work

The old rule that banking and insurance are like oil and water – they don’t mix – was ignored in the late 1990s with the emergence of a new concept: bancassurance.

The idea was that insurance companies could sell their products to banks’ larger customer bases.

The banks were all in, seeing a new revenue source. The majors even set up their own general insurance operations, but by the 2020s they had sold them. Banks abhor risk.

The last shot at cross-selling insurance with other financial products was Suncorp’s hugely expensive Marketplace strategy, which was a dismal failure.

20. Recruitment: still an issue

Difficulties recruiting university graduates into the industry have been with us forever. And they will remain as long as the industry fails to project an image of what it really is.

When I joined in 1991, nobody would believe I’d left a senior role in the oil industry for fusty old insurance. In the years since, I’ve met Australian insurance executives in all parts of the world who found this industry has no borders; no matter what your interest, insurance has a place for you.

Banking and finance are about money; insurance is about whatever you want it to be.

It’s challenging, diverse and full of opportunity. Once you’re in, you’re hooked.