Our management style is ‘a light hand on the tiller’,” says John Fowle, CEO of specialist (re)insurance group Chaucer. “By this I mean a company where everyone can work in an environment that allows them to make as many smart decisions as possible.”
The point, he explains, is not that staff are free to do as they please. Rather, it is that they know what a good decision looks like (and what a bad decision looks like) and they have a control framework that lets them get on with their jobs. “People should be able to work in the way that works for them. We’re trying to create the best possible environment for the best possible people and – then judge them on their effectiveness.”
If all this sounds straightforward, the reasons for running the company this way are similarly uncomplicated. People who are happy and empowered at work perform better. This benefits clients, builds strong relationships and ultimately means a business that is profitable and sustainable in the long term.
Obvious it may be, but this does not mean it’s easy. Indeed, running companies well can often feel a little bit like staying in shape. We all know how to do it – exercise and good diet or good management and good culture – but doing it consistently all the time is very hard work. So, how does Chaucer go about creating an environment where staff can deliver their best?
Fowle says one big factor here is the quality of the people. Having intelligent people who really know their area is a good thing in its own right – but it also makes it much easier to create a collaborative and collegiate atmosphere. “When it comes to making decisions, two minds are better than one. And four are better than two. Obviously, there’s a limit to this, but if you get the right input from the right people you will make a better decision.”
This does not mean decisions are made by committee – the buck stops with the decision maker, who is responsible for the choice. “But it’s an ethos and a way of working.” It is also rather different to the stereotypical, Darwinian, survival-of-the-fittest culture found in many City firms. “I only want people to join Chaucer if they really want to excel. But they need to be people who want to succeed along with everyone around them. I like nice people. I like fundamentally kind people.”
For this reason, he adds: “We don’t do superstars. Of course, we have people who are very talented and are star performers. But you want a culture where everyone is pulling together, rather than thinking ‘it’s all about me.’ There are aspects of our business where you need an ego, but not an ego that outstrips reality. If you can get people who have a little bit of an ego and a lot of ability, they’re gold dust.”
This type of person – talented with just enough of an ego – works for clients too. “Our customers want to talk to underwriters who actually listen to what the problem is. You’re not ramming solutions down their throats. You’re hearing what they have to say. A solution that works for the client and makes a fair profit for the company – that’s a good day at the office.”
Creating a great environment is also tied up in staff retention and in being a specialist reinsurer. Chaucer, he explains, is not the kind of insurance most people think of. Rather than homes and cars, it’s esoteric stuff, ranging from satellite launches to reinsurance of complex property deals. “It’s all quite specialist, very nuanced and technical in places. This is why we pay our people well and create a company they want to stick around for.”
The average length of tenure at Chaucer is 6.2 years. This compares to around 4.5 years across the workforce as a whole. “We’ve got people who joined us at 18 and are still here in their mid-30s,” says Fowle. “We pay them well and try to create opportunities for them so they stay.” This is a benefit for both the company, and its clients.
Longevity of tenure means a real depth of expertise with people who really know what they’re doing and understand how markets and sectors have changed. It means colleagues who value each other’s views and seek each other’s input and opinions. At the team level, it means people who complement each other – the brilliant actuary who has a deep and intuitive understanding of data might be paired with a highly empathetic client-facing employee who is great at relationships.
For clients it means expert advice and long-term relationships. “Clients want continuity of thought – they don’t like dealing with underwriters who chop and change all the time,” Fowle explains. “If things have changed, and they’ve been paying premiums for ten years, they need someone who can explain in detail why they’ve changed. They’re sophisticated businesses, not drivers buying car insurance.”
Of course, even in a light-touch, right-environment business, you still need to manage your people. “You need to do it personally. You need to be looking after them, making sure their heads are in the right place and that they’re happy. Then of course, you have to manage the people who manage the people.” Finding the time to do this, he adds, is a real challenge. It is incredibly important and yet often gets put to one side. “It’s hard to do across a business, to the extent that you’d like to. In a perfect world, you would spend a lot more time managing people – just checking they’re okay.”
Of course, the world of insurance is changing. Chaucer is now owned by China Re, one of the largest reinsurers in the world. This brings opportunities, as does expansion outside the Lloyd’s market. Nonetheless the goals remain the same – to be the best by having the best people and letting them do the best job.
However, Fowle says, you can’t stand still. “If you do every little thing a bit better than you used to, or a bit better than everyone else, it works. It’s the Dave Brailsford [professional cyclist] principle of marginal gains and continuous improvement. Keep doing that and the aggregate effect of it can be very impressive. That’s what we want to do – be constantly nudging ourselves and everyone at Chaucer to do everything a little bit better, all the time.”
Published on 18.04.2021