The Intelligent Quarterly from the publishers of The Insurance Insider

Summer 2018

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Talent spotting

Carlos Pallordet

Ask industry leaders what makes their organisations great and one of the things you are likely to hear is that it's about their people.

Company websites, annual reports, chairman's statements, executive speeches - all reference talent as the key to success and will take pride in the efforts they put into promoting it. If you look at the (re)insurance industry - a trade predicated on the notion that it is a "people business" - you will see this trend widely amplified.

The (re)insurance industry values its workforce like no other industry and will go to any length to attract the best talent and protect it. But there is more to it than just having the best experts working for the firm.

Like no other industry, companies in the (re)insurance sector will continuously strive to understand who they are doing business with, who they could be partnering with in the future and how their competitors are perceived. There is paramount value in understanding the human network through which business flows.

The access to this intelligence is fragmented, however. Business leaders have the means to measure the performance of their own staff objectively, but are unable to replicate this beyond their own boundaries.

Views outside the firm are frequently informed by circumstantial exposure, personal accounts and subjective perceptions. And there is only so much that you can rely on from word-of-mouth to understand who's who in the industry, particularly when it comes to the newer generation. After all, it takes time to build a reputation.

So the subject continues to be mostly the territory of recruitment partners, who work individually with companies to help them to fill this void. With a discovery process that is subjective by nature, any practices that can tilt the balance towards impartial and measurable evidence are a positive addition.

Mapping cyber
It is against this backdrop that last summer The Insurance Insider had a stab at the topic, launching a survey-based ranking of London market underwriters and brokers. The initiative was aimed at providing a quantitative measure of talent across the market that could complement the knowledge that companies have gathered through the usual channels, while also identifying and recognising hitherto hidden talent.

The line of business chosen to roll out the first pilot was cyber liability. The data collected provided the first comprehensive view of the cyber insurance talent map, uncovering the attributes of 165 professionals across 60 companies, as reported by 250 respondents active in that class.

Most importantly, it proved the feasibility of the research project and laid the foundations for a data product that could be scaled up to other classes of business, a journey on which The Insurance Insider has now fully embarked this year.

From the beginning, there was a determined attempt to lay the foundations of the rankings on solid ground, and two things were instrumental in achieving that purpose.

The first was the inspiration taken from The Insurance Insider's sister publication Institutional Investor, which started canvassing Wall Street 45 years ago. Now running more than 60 rankings across different geographies and areas of interest, Institutional Investor has continued to improve its methodology and research procedures over time and The Insurance Insider was able to tap into that body of expertise.

But the concept needed to be vetted and adapted to the (re)insurance market. For that purpose, The Insurance Insider's research team took guidance from 22 prominent business leaders, comprising CEOs and non-executive directors, from the London market. Their advice was essential in identifying and defining the key attributes of good underwriting and broking, as well as understanding the idiosyncrasies of the market that needed to be addressed in correctly adapting the product.

The road-testing process also validated the need for objective and comprehensive assessment of London market talent, as well as the advantage conferred by The Insurance Insider's independent status in collecting this intelligence.

Click to enlarge

Ranking methodology

Following the cyber pilot, the 2017 Rankings initiative has begun with coverage of political risk and political violence. Surveys of both classes were launched simultaneously in early February.

While a few useful lessons were learnt from last year's cyber exercise, the initial rankings framework proved solid enough to make changes to the rankings formula in 2017 negligible.

Simplicity is the defining feature behind the model now being rolled out to other lines of business.

To begin with surveys are based on individuals, so respondents only nominate and score professionals - not companies - with brokers voting for underwriters and vice versa. Respondents are not prompted to vote on a pre-determined list of candidates, leaving them free instead to volunteer their own choices, reflecting top-of-mind awareness.

Respondents nominate their top three choices with three points assigned to the top professional, two points to the second position and one point to third place. This scoring method - known as the Borda count - provides consistent weighting to each vote while accounting for the voter's order of preference, hence providing the best representation of market preferences.

Apart from nominating the best professionals, respondents provide a score on a set of specifically defined attributes. These are based on the understanding of what defines a good underwriter and a good broker, and hence differ for each of these groups.

Click to enlarge Underwriters, for example, are assessed on knowledge/experience, negotiating skills, work ethic, communication skills, creativity and consistency.

For both groups, respondents also have the option to freely express their main consideration behind each of their designations. Complete confidentiality is offered to all participants, allowing for honest and trustworthy scores and testimonials.

Surveys are mainly conducted online but the data collection process is complemented with phone calls to ensure the required levels of participation. Time and internet protocol tracking, paired with the analysts' validation of all individual records, ensures data integrity.

The guiding principle behind the survey design and data collection process is statistical significance. To that end, detailed lists of potential participants are screened and filled in preparation for each survey launch, so once the polls open the participation of all relevant market practitioners can be closely monitored.

The process is thoroughly managed to target a maximum error margin of 10 percent at a 95 percent confidence level, which translates into samples sizes that are large enough to ensure that ranking scores remain unchallenged if the surveys are run repeatedly.

More than a ranking
Statistical significance aside, high participation rates also mean that a richer, denser body of information has been hauled out of the shadows.

Survey forms are deliberately designed to enable respondents to complete them in under five minutes but that still means - when the dust of polling activity has settled - that the survey will have racked up some 20 to 30 hours' worth of interview time pertaining to the specific line of business surveyed.

The ranking of the top brokers and underwriters is the first thing that comes to mind when focusing on the survey results and is indeed what The Insurance Insider's editorial team has commented on. As the backbone of the survey it is also valued by respondents, as individual scores and positions are confidentially reported back to every participant.

But a lot more information is tabulated from the surveys and compiled in the anonymised Excel-based Rankings Data package that The Insurance Insider makes available to companies.

First, individual brokers' and underwriters' scores from the main rankings of practitioners are regrouped as teams to create the ranking of companies. These broker and underwriter company league tables hence reflect the aggregate value of each firm's team members rather than straightforward brand awareness.

In the case of the Cyber Rankings for example, a total of 30 underwriting companies and 30 broking houses were ranked on the back of the individual scores of 165 practitioners.

A second set of outputs is given by the segmentation of rankings. Two of the survey's filtering questions allow for the segmentation of rankings by respondents' years of experience and the size of premiums underwritten or intermediated in the specific line of business.

These "sub-rankings" allow users to understand how practitioners across different companies rate with more or less experienced players and with bigger or smaller market players.

A third spin-off of the survey is the analysis of attribute scores at an individual level. This involves aggregating the marks given by respondents to each of the nominees' key traits.

The scores are not directly comparable across different practitioners (as the sets of respondents behind each individual average differ), but the results will objectively reveal what the relevant strengths (or weaknesses) for each nominee are. For example, it will show that a given practitioner is more valued for their knowledge or work ethic rather than their communication skills.

But it is the tabulation of all results at an individual level in the form of a "profile view" that provides perhaps the most eye-catching picture. Users of the data package can select all nominated practitioners and display individual profile pages including their basic information (such as job title and years of experience) and examine both the analysis and the testimonials about the practitioner - from being solid presenters in client meetings to having good humour or social standing - behind their specific accomplishments.

Overall, the Rankings data package allows for a comprehensive mapping of talent in each line of business. With the 2017 calendar extending the coverage to six new classes plus a repeat of the cyber rankings - and more classes set to follow thereafter - we fervently hope The Insurance Insider's new Rankings make a powerful contribution to a topic that is of paramount importance to the market.

This article was published as part of issue Spring 2017

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