Stuart Heath, Head of Delegated Property

An introduction to Stuart Heath, Head of Delegated Property.

TMHCC underwrites a specialised portfolio of Delegated Property insurance to a broker network across the UK and Europe. With a combined team offering over 125 years of knowledge in the industry, our specialist underwriters are dedicated to providing an extensive range of residential and commercial insurance solutions for clients. 

How long have you been working in insurance and how did you become an underwriter?

Unlike many people in this industry, I always wanted to work in insurance. Strange, I know, but it takes all sorts! I was 17 and still at school, only two terms into my A levels when I decided that I would head up to London and get a job in insurance.

I worked at various brokers in the Lloyd’s market before I finally made my move into underwriting with Equity Red Star, a Lloyd’s Syndicate, in 1986. I started in the Motor team working through to their property related account and ultimately holding the position of Deputy Active Underwriter.

In 2009, I joined Novae, setting up their UK & European Property book and joining their executive board in January 2015 responsible for their worldwide Property insurance and reinsurance activities. When the company was acquired by Axis, I held the role of Head of Worldwide Property insurance for the International Division, resigning in 2018.

In November 2019, I made the move to Tokio Marine HCC. All of that makes about 40 years in the industry!

 

What has been the biggest change from when you first started in the industry? 

The digital transformation of the industry has accelerated over the last two years as everyone was ‘forced’ to adopt technology with remote working just to keep the lights on. Not to mention the fact that when I started, we were smoking in the ‘Room’ and having entry cards to record risks/exposure attached to each Syndicate – at least there is much less paper around now!

On a serious note, this will have an impact on everyone, but I think Lloyd’s will see the biggest change, and it should help the market to start dealing with its high expense ratio and maintain its position as the (re)insurance marketplace.

 

What are the biggest challenges/risks that your department have had to overcome in the past five years? 

We are still seeing a huge amount of M&A activity which is by its nature disruptive as it has an impact on the relationships in place.

But the big one is climate change. It’s a massive issue, and everyone has a role to play, particularly the insurance industry. Society is looking to us to help manage the current and future risks, and we need to (collectively) get our heads around how we do that.

And finally, underwriters and brokers have had to pivot quickly to a hard market mentality. That’s not easy, and clients can often find it hard to understand what’s going on. We’ve all got a role to play to educate the client base better.

 

What are your predictions for the future of the market, short term and long term? 

In the short term (next 12 months) I think underwriters are still going to be dictating terms and risk selection as they correct their books. But over the longer terms (five years), we will need to start transitioning our book from a hard market to an increasingly soft market. That again will require some educating and training so that we ensure each business strategy is implemented according to their desires.

This transition not only covers the insurance aspect, relating to pressures for wider coverage, increased commissions and reduced rates, but also capital being widely available from reinsurance markets allowing us to arbitrage our positions, and enabling us to maintain some lost margins on the front end.

I fear for the future of Lloyd’s as the market has not been fully attended to for almost two years and the urge to return is not there. That endangers our position in London as the most attractive place for insurance. In my view, the only reasons that Lloyd’s has survived over the past decade is its ability to have multiple Managing Agents in one place to complete a risk with multi–Insurance Companies situated within half a mile, and the licensing benefits. If we lose one of these aspects the risk of London not being the heartbeat of insurance gets higher.

All of this will have to be managed with the spectre of climate change looming in the background.

 

In your opinion, what makes TMHCC different from other insurers/why should brokers place their business with us?

For me, there are three key reasons to choose to work with us. Our breadth of offering is huge, with multiple entities (HCCI/TME/Lloyd’s) working together to provide the most comprehensive cover possible.

But it’s not just the cover. It’s the way we provide that cover. Our underwriters are empowered to make quick decisions, our claims teams are fully embraced and knowledgeable on risks written by the underwriters, and we have first-class backup in our support areas such as exposure management and our Bridgend office.

That combination of cover and service is what makes Tokio Marine HCC different.