The world is getting smaller and smaller by the day. And as a result, brokers potential to work with clients from other towns, other states and maybe even other countries is getting bigger and bigger.
Take, for example, the news on Jan. 22 that Willis Group Holdings will envelope its Human Capital and Benefits Practice into a global construct. The man tasked with leading the newly universal practice, Tim Wright, is already CEO of Willis International a decision he says is intentional to ensure the leadership is truly global in nature. While Wright is busy settling in to his new role, he made time to talk with EBA about the companys decision and much more, including the recent advancement of the National Association of Registered Brokers and Agents (also known as NARAB II) with its passage in the U.S. Senate. Both he and Jim Blaney, president of Willis North Americas Human Capital Practice, say theyre encouraged by what that organization might bring to the U.S. market by allowing brokers to get licensed in all states through one single membership an opportunity that would open all brokers up to a bigger umbrella market just like their own restructuring is aiming to do.
Blaney predicts the bill will not actually pass during this election year, however, I do think its not a matter of if but when. I do think it will help the globalization across all the market segments. It creates opportunity for us, he says.
Regardless of when the U.S. markets could open up due to NARAB II, there are many other reasons why benefit advisers and brokers might be thinking in a more global way. And Wright has a lot to say in the way of advice, lessons and goals:
Whats the strategy behind uniting all of Willis employee benefit practices in this global way?
Its fundamentally about growth and its about growth by bringing the best capabilities that Willis has to offer no matter where they exist around the world to the clients, locally. Obviously, human capital and benefits businesses vary enormously from country to country. But the needs, and in some cases even the clients, are the same. And thats where the global practice comes in. In the developed market like in the United States and many developed markets, our clients are looking for impartial advice on how to navigate all of the changes in the marketplace the different regulations, the different rules, the different potential outcomes so that they can provide compelling benefits to their employees.
So those themes, even though the countries are very different, theyre common. Transferring the best practices and experiences and capabilities from one place to another puts us in a better place to help our clients. And equally in some of the higher growth markets again, lots of local differences but fundamentally all of our clients are trying to do the same thing, which is to attract and retain the best people. How do they use benefits to do that? In a country like China, which is growing massively and the biggest concern that employers have is, Can I keep the talented people that Ive attracted? the benefits package is another key component of doing that.
So its about taking those common themes, sharing capabilities and then we also have a growing number of clients who have operations in more than one country; we estimate that of the clients that we have in a country, about a third of them have operations of one kind or another outside that country in another market and theyre increasingly looking for someone to advise them on, How do we deal with the benefits in this other country? So, for all of those reasons, we think were in a better position to meet the clients needs if we have a global practice rather than just a series of local businesses.
What are some other high-growth markets?
We believe that human capital and benefits itself is a high-growth market. For the reasons youre familiar with the shift from public to private provision, from defined benefit to defined contribution, from aging populations and increasing medical costs. So there are a bunch of fundamental drivers across all of these markets that mean that this is a high-growth business. Whether its in a mature economy like the United States or United Kingdom or its in one of these more high-growth, developing markets. And on developing markets in particular, in Willis we have three regions that we define as these markets we have Latin America, we have Asia and we have a curiously described region called Central Europe-Middle East-Africa. While theyre different places, we see increased penetration of insurance employee benefit products.
We have another dynamic here which is very important for Willis, we have a 30% share of the leading French insurance broker Gras Savoye. And we have the right to buy out the remainder of that in 2016. Theyre the No. 1 property and casualty and benefits broker in France. But they are also very international and have operations in 50 countries outside of France, including Africa and the Middle East.
Why were you confident about this decision? Were there specific market indicators you were looking for in order to make the move?
I would say one of the metrics is: What is the growth rate relative to P&C business? And our experience in our international business is that employee benefits and human capital is growing two to three times the rate of our P&C business. In our results, which were issued [Feb. 11], our P&C was also not bad either.
So were seeing stronger growth because of the fundamentals I described earlier, but I would make an additional point. Which is: This is an unusual business, this both a boardroom issue and a cafeteria issue. You dont really have that in P&C. The board cares about this because it goes to the heart of its people strategy. But actually, just about every business today is a people business, and if youre getting the people strategy right, thats probably a strong indicator of success thats why benefits go to the heart of the boardroom.
The reason I say its a cafeteria issue is that this goes to the heart of someones life. Its about their health, their retirement, their family. Its about what could happen to them if they get sick. What could be more important than that?
In an age of growing consumerism, where people have increased awareness of what their needs are and increased access to different solutions, people are more demanding. Those two things mean that this is a very hot topic and so were confident if weve managed to grow this business two to three times the rate of P&C without having a global practice, just think what we can do with a global practice.
What are your personal goals for this unification over the next year? And longer term?
Internally, I got lots of calls and emails from people who work in our human capital and benefits businesses in North America and around the world. They were saying how they were excited about not just being part of a geographic business, but about being part of a global practice. They valued the idea that theyd be a part of a community and thered be a sense of identity for them. And thats one of my goals, to create a sense of community and sense of identity. And maybe the employees continue in that geography or it may be an opportunity for them to work elsewhere in the group thats already created some buzz. We all know people want to manage their own professional development, their careers, and this is a way they can do it and they could have another career somewhere else and thats exciting.
Then externally, weve had quite a lot of reactions from clients, these are clients maybe on the P&C side who said, I didnt know you had this global capability. Im not particularly happy with my current provider and I relish the chance of having an alternative. And for existing clients we serve them around the world, so for them this is the embodiment of what weve been providing them for some time.
And then also the carriers. We had a lot of insurers contact us and say, We want to work with you to bring great solutions to clients. So, some of the effects were seeking to achieve: We want to have a big impact, we want to grow this business and we want to help to define something more compelling for our clients. I think we can do that by being more client-focused, more connected and more innovative and I think there is room in the market for that offering.
Do you expect other firms to follow suit?
I think there is a general trend toward multi-nationalizing. We see that in our clients space. As I said earlier, there are an increasing number of organizations that operate in multiple countries. But to follow what were doing, others would need to bring two elements together: The first is, they would need to have a global footprint to unite, and not many companies have that; were in over 120 countries, most of those are wholly owned subsidiaries through our partner Gras Savoye, which as I said, we have the opportunity to buy its entirety in 2016.
And second, we have a history of being more connected Culturally, we are more inclined to connect to different organizations than perhaps others. Weve taken that to the next stage and we call it Connecting Willis. We have a series of initiatives, which this is just one of, which is about taking and connecting groups of people, whether they work in the benefits industry like were talking about here or in another particular industry or have a particular product expertise and bringing together as global practices, global communities.
So those are two of the unique features the footprint and the culture that I think would be important for anyone to follow.
As youve called employee benefits a growing market, how do you think your practice will grow in the next year or two?
Im going to be in trouble if it doesnt grow. Dominic [Casserly, CEO of Willis Group Holdings] was very clear the reason that he wanted to do the practice, and asked me to do this job, was for all the reasons weve discussed and that we would look to build on all the growth weve had in the past. Were quite bullish about the future.
How do you think the overall field will grow in the same timeframe?
I think its going to be very interesting and will vary quite a lot from one place to another. In North America, there is an enormous amount of change taking place. That is good news for an adviser because it creates complexity
and the advisory space benefits from uncertainty and complexity.
However, quite a lot of the smaller advisers, brokers are more focused on intermediation brokering the benefit than the value-added advisory services.
My general advice is to focus on the client, serve the client well, and play to your strengths. To serve the client you need to have the strengths and if you dont, you need to think about acquiring them.
Insurance is so grounded in the local, in premium determination, etc. How will the global focus continue to balance with that local necessity?
Well you really need both. If you have a client, lets say even a multi-national client, then what theyre looking for in their benefits adviser is the ability to execute locally, local programs but who also has the ability to coordinate across those, to manage the overall program, to benefit from pooling, introduce common programs across those businesses. Thats a great example of the global, of the local working together; probably the vast majority remains local, but a lot of the value-added services you bring to a client is global in nature.
Can you talk about any reservations you had about taking this action?
Basically, none. There are a few, but once we came to the conclusion it was a little bit like, why didnt we do this previously?
Two risks, if you like, not necessarily reservations. One is what I described earlier were creating great expectations internally and externally. The other risk is that some people might get too excited about the practice that they may in some way neglect what theyre doing, which is vitally important to our clients and to us. Those are normal risks you have to navigate when you do something different and when you are driving change.
How is your background important as you move into this employee benefits leadership role?
My background was in insurance, but what Ive done in insurance has varied quite a lot. I started out in life as a management consultant and I was advising mainly insurance companies, brokers, reinsurers on the P&C side. That consulting background is quite helpful because although Ive been based in London for most of my life, that work took me around the world. That gave me a world view perspective thats very important and helpful in this role. It also gave me an appreciation of advice and working with clients. I spent most of my professional life advising clients and thats mostly what were doing here. Its one of the things that I delight in doing now. So I think the globality of the consulting background and the advisory nature of it put me in quite good stead to do this job.
The other piece of it is that Ive been at Willis now for six years. I joined as the group COO and took on running International in 2011. Thats given me a very practical understanding of how you get things done in a global organization.
Many of our readers are independent employee benefit advisers. What do you think they can take out of this merger?
It does beg this question: What do they bring to the client? If they face competitors who are able to bring to their client capabilities and a footprint outside of the immediate geography, meaning a town or a country, then they are a bit challenged. The take away for them is, if you dont think you have what your competitor has, youre going to need to find a way to get it.
Take us through a typical day or week for you: what are the chief areas taking up your time and attention right now?
I have the practice leadership role in human capital and benefits in addition to being CEO of International. The first thing to say is that I travel a lot. Im based in London, but this week Im in New York, last week I was in Dublin for a board meeting, the week before that I was in Paris and Frankfurt, [Germany]. Next week Im in Buenos Aires, Argentina, and in three weeks time Im going to be in China. So in addition to worrying about whether my plane is going to get out, the other dynamic is that communication becomes very important. You really need to err on the side of over-communicating so lots of video conferences, conference calls, telephone calls, email interactions when Im on the road because I feel like my office is a seat on an airplane.
The other part of this is that a lot of work with starting the employee benefits practice is getting around to talking to people. The real experts here are people like Jim Blaney and his equivalents all over the world and with Gras Savoye and our other partners. So at this point where we are in the game, if you had a playbook for the development of the practice, Im in data gathering mode. Im talking to lots of people, forming teams to get things up and running. This was announced on Jan. 22 so its still the early days.
I get a lot of energy and excitement out of the diversity that I get to visit, I really enjoy that. Last year I visited 16 countries and if I possibly can, I read up on the country before I go, its history and Im keen to get out of the office and hotel if I can. But thats hard, too. I think two of those 16 trips I managed to tack on a days vacation or a weekend. If you can combine your personal passions with your job, thats success.
Have you been to the Willis Tower in Chicago?
Of course, I was there for the naming ceremony, which was a fabulous event in 2009. I was the group COO at the time and I joined other executives for that day. The street had TV vans all the way down, it was extraordinary. Obviously, it was a big event for Willis and the fact it was slightly controversial did us no harm.
Theres a serious message from it which is, we had just made a big acquisition in the United States of HRH and we had five offices as a result of that acquisition in the Chicago area and we brought them together in a single location. We went into what was called the Sears Tower and that became the Willis Tower. At the time, the occupancy levels were not great, post 9/11 there was a nervousness about iconic buildings, and we took up a significant amount of space and the renaming was appropriate. We were followed in by others, including United [Airlines.] We cant claim all the responsibility, partly it was about the economy, but things have picked up in the Willis Tower since we named it. EBA
A clients perspective
Kevin Close, senior VP of global compensation and benefits at EMC an IT company based outside of Boston talks about how Willis global decision impacts his business
How does Willis new global practice affect you?
We think its great. Willis has been a partner for 12 years. And when I say Willis, theyve acquired a lot of clients over the years. So weve had the same account team for those years. When I talk about Willis, I say they are my most trusted partner. Theyre not a vendor; they are a true business partner. So about two years ago now, we embarked down the path of appointing Willis as our global benefits brokers. They probably dont do all of our countries, were in about 72, but they do most. And we have an agreement with Willis that they can provide the same or better level of customer of service that our employees in that location have come to expect and they have to be competitive in price. Its a very transparent relationship and so weve been treating Willis as a global entity for about two years.
So now that theyre considering themselves a global entity, does it change anything?
I think it makes it easier for them. I think it makes it easier for Willis to meet our needs in all of the geographies because they have direct influence over their local colleagues. I think bringing them together, it gives Willis a lot more leverage. But Ive gotta say from being a customer, theyve always solved that problem for us. I didnt have to go to Willis London or Willis Japan, I just had to go to Willis.
How does Willis compare to other brokers?
Before we moved to using them as a global broker two years ago, we had relationships with all the multinational brokers. We were managing each country and each relationship. And we werent gaining leverage with knowledge base and it was all being captive with each individual broker. By moving to a global broker, were able to consolidate much of that information.
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