Lukas HERRMANNS: We see diversity as an advantage and not as a disadvantage. The markets, the clients' needs and the expectations towards the role of the broker differ from country to country as the requirements of clients within a country also differ. Not every client expects the same standardized set of solutions from a broker. As a consultant and risk advisor we deliver individual solutions to help our clients thrive. The diversity from a country perspective helps us to balance our portfolio in order not to be too dependent on certain market volatilities.
XPRIMM: What are the factors, in your opinion, that have enabled a stronger presence of the insurance brokers in some of the region's markets, in comparison with the markets where the insurance distribution is mostly done by agents or by insurers' own distribution networks?
L.H.: As a broker and insurance consultant, we represent the interests of our clients and try to develop the best individual solutions for each of our clients. We support them to navigate through their complex risk environment along the whole supply chain. We don't have the duty to sell predefined products or to deliver a certain combined ratio as an expectation from the shareholders. That is why we can specifically tailor THE risk concept which fits the most to our clients' needs. We frequently see our clients' value and require our advice which does not necessarily lead into placing a cover for them but can be an advice on how to minimize the risks of a company.
XPRIMM: Besides their traditional counselling role, insurance brokers may also play a role in the insurance products' design and development. How much is this capability used in the CEE insurance markets?
L.H.: Solutions we provide requires innovation and know-how which we both utilize local and global capabilities within the supply chain. Considering the appetite from Insurers to do business in the CEE region, the majority of the solutions we offer to almost all of clients show the same qualities and quantities almost everywhere in the world.
We believe part of our responsibility is that we insist on continuous development of insurance market and provide the services needed. We can say that we already have various collaborations with many insurers on different solutions.
XPRIMM: How do you see the future years in the CEE insurance distribution? Would it be in the consumers' best interest if insurance brokers would have an increased role in the insurance distribution?
L.H.: According to Marsh Global Insurance Index, insurance market continues to push for higher levels of pricing increases due to the combined effects of social inflation pressures, persistently low yields, and a number of large underwriting losses, including from COVID 19. While capital remains adequate in most lines, insurers' risk appetite is reduced as they are increasingly cautious in an uncertain environment. This makes the presence of a broker at the side of the client and serving to clients' interests much more prominent. Besides ability of a broker is not limited in providing insurance solutions also in aligning them with advisory services and technology. This, as we see it, shows itself as solutions that will further enrich our clients' in their own fields of activity, and further provide them an advantage in the competitive market.
Lukas HERRMANNS is Chief Executive Officer of Marsh Germany and CEE (Central Eastern Europe), effective January 1, 2021.
Mr. HERRMANNS has over 25 years of experience in risk advisory and insurance broking to the position. He joined Marsh in 2008 as Country Head for Austria and subsequently expanded his geographical responsibilities to include the CSEE (Central Eastern and Southern Europe) region. He also acts as Corporate Country Officer for Marsh & McLennan in Austria. Before joining Marsh, he held senior positions with both Aon and Willis Tower Watson.