FEATURE
NEW ZEALAND IS SIMILAR TO SOUTH AFRICA IN A LOT OF WAYS. IN CAPE TOWN WE ALSO GET A COUPLE OF SEASONS IN A DAY. THERE ISN’T ANYTHING ABOUT NEW ZEALAND I DON’T LIKE.
came as a surprise. “There are lots of big insurers with lots of capacity but brokers tend to place their risk on a co-insurance basis so the risks are shared. In other markets there might be one or two main players with reinsurance behind them.” Raines said that could be because the brokers had a “lot of mouths to feed”, which could be challenging. Many were using a panel model to place their business, he said. They would conduct interviews with insurers to determine what their capacity was and map the insurers against their clients’ needs. “[They’ll say] on this risk needing this capacity this insurer is the best. They can run a test across 20 different insurers and end up with a panel of no more than six or eight. It allows a broker to be more effective to deal with a smaller panel.” He expects insurance brokers to have a place in the market for some time yet. “The broker channel will be around as long as I will be but it has changed a lot. Speaking as an ex-broker, too, the amount of technology available to insurers to work directly with customers is increasing.” That was evident in the Christchurch earthquakes when lots of insurers worked
through claims directly with the client, sometimes excluding the brokers, he said. “The brokers’ position is not threatened but it has changed.” Raines said declining insurance rates were affecting income for insurers and brokers. "They are having to come up with ways to look for alternative income. That’s as challenging for them as it is for us.” AIG offers a strong history in New Zealand and global reach, he said, with the ability to offer large capacity on single risks. It is focusing on getting closer to clients and developing a new platform for commercial business products, to allow brokers to arrange cover for their clients more easily. Raines is happy to have made the move to Auckland. He lives in Remuera, a short commute from work and says he plans to see out the rest of his career here. “I’m acutely aware that I am number five or six in a short period of time and I don’t think that’s good for the business. Brokers like to get comfortable with a CEO. One of the conditions I asked for to come here was that it was considered
long-term.” He said he wanted to be in the role long enough for the company to bring in some local talent for the future. “It has been a long time since we have had a local as a CEO. I would like to see someone local take over from me. I’d like to spend some time with them. I’m five years away from retirement so it could work out.” In that time, he hoped to see AIG diversify its business mix so it was not so heavily commercial. “We’ve never been in the residential property insurance market and we are going to enter that market in a segment.” It will also look for acquisitions where possible and work to increase its geographic footprint. But don’t expect him to start supporting the All Blacks ahead of South Africa any time soon, despite the logo on their chests. “It’s head and heart thing. My heart is always with my home country but looking at the way they had played up till the World Cup I didn’t hold out hope. Even in the semi I didn’t think South Africa were in the game so I was relieved I could focus on the All Blacks in the final.” www.covernote.co.nz
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