Speaking to The ReInsurer, Wicks urged brokers to embrace technology in order to take cost out of the system, highlighting that cost reduction is being driven from every area of the market, including Lloyd’s where it is a central stream of CEO John Neal’s plans to transform the market.
“There’s a lot of discussion over the remuneration of brokers and that’s battling against a continual backdrop of people looking to disintermediate the business,” Wicks said in a video interview.
“I can see that [cost reduction] being focussed on the brokers,” he added. “The percentage of cost that is taken out through the distribution process is quite marked and is something that needs to be looked at.”
In particular, Wicks pointed to Ed’s Lloyd’s approved London placement platform, TradeEd, which is not only helping to reduce costs but is also enabling business to be done faster.
Wicks said there is now a focus on being a “holistic” strategic advisor which means that brokers need a more complete view of a client and their risks. Technology is an essential part of that, he added.
“It’s moved something that has always been an impure science and made risk measurable and gaugeable,” he explained. “If you embrace technology in the right way then it can be a real benefit in your decision making rather than a threat to your existence, it’s a question of how you approach it.”
Commenting on the recent wave of consolidation in the broker market, Wicks pointed to “a strong will” within the market to have alternatives to the major powerhouses.
“People want to deal with entities that aren’t so large that you feel you have to do their bidding,” he said. “At Ed we have been strategic about who we choose as clients. We tend to find the small to medium-sized clients are more attractive as we are culturally aligned – we can grow together.
“We’re battling against two huge goliaths that exist in our space,” Wicks added. “There’s plenty of business out there and there’s plenty of reasons why people would want to use a broker the size of Ed.”
As rates increase and the market hardens, the executive was bullish on Ed’s outlook and pointed to its burgeoning talent pool as having the experience needed to handle the changing conditions.
“These are people who have seen true hard markets come and go and know how to conduct themselves accordingly,” he explained. “We’re well positioned to give good advice to our clients and have enough benchmark strength to support our younger brokers.”