An exciting time for UMAs

COVER: Centriq is very much a big player in the UMA market, focusing on specialist underwriters. Can you give us your observations on the UMA environment at the moment?

Martin: When it comes to UMAs you can usually see the niche and the focus, because they are so much smaller. There is no doubt that it is about that specialist niche, the technical and specifically, underwriting ability. When we say specialist skills, we’re talking about underwriting ability, not necessarily finance, actuarial or any other technical ability.

I am talking about that “dyed in the wool” specialist underwriting skill, which has become scarce due to various factors. For example, we have an ageing workforce in South Africa. A recent example of a great loss to the industry was Russell Meyers’ exit from Mirabilis. You can’t put a price on that level of experience and what someone like him must have seen in the industry over the years.

I recently met with a Marine specialist who is approaching 70. Who is going to replace him when he steps down? When we start thinking about finding the next person, we are faced with a problem. We have started looking at younger talent, which is great, but the thing about experience is, you only gain it through experience. It is a function of time.

Secondly, insurance is not perceived as a particularly attractive career. To a lot of people outside the industry, it sometimes comes across as “dull and boring”. I think it’s an industry that treats its people well, on balance. Whether it’s a function of that, or whether it’s a function of the insurers or the niche areas not necessarily doing enough to bring that next wave of talent through, there’s no doubt we are lacking specialist skills.

I think we even see this to a degree in the commoditised lines. Not everything can be black box. There is still an element of underwriting, specifically in commercial risks. There is still an element of acumen that goes into underwriting commoditised lines, which is a function of experience. Even now, when we’re looking for a new underwriter, all the good CVs you get are the plus 50-year-olds, which is great, but how much time are you going to get out of them? These are also not the people who will take over the business. They will more than likely exit at retirement age or earlier.

COVER: The IISA is doing quite a bit of technical training, but is it at the level that you want in terms of specialisation, etc?

Martin: Yes, but we are not talking about general insurance education here. We’re not just talking about regulatory frameworks and of those sorts of issues. While these are obviously important, we are talking about the ability to look at a risk and get a sense of it almost instinctively. We have some incredible UMAs in our stable, so when you talk to these guys, their understanding of risk and pricing is phenomenal. They’ve seen it before, somewhere in the last 20 or 30 years, they’ve seen it. If not that exact risk, then that type of risk. They will run off a list for you of what you should be looking for and what could go wrong. It is not a book that taught them that; they’ve walked the yards, those hard yards.

By Martin Le Roux, Managing Executive, Centriq