Profile: A new lens – and an eye for opportunity

Zurich’s UK head of retail David Nichols, speaking in his first interview since taking on the job at the start of the year, says: “We could do more is the thing that really excites me.”

Keen to praise the achievements of his predecessor David Martin, who stepped down in October to head over to Aviva, Nichols acknowledges the “tremendous” progress in the retail division to build a strong platform, but is eager for even more growth.

This is all in keeping with his mantra of continuous improvement.

“There is an opportunity out there for us to do things slightly differently to find a different way of increasing our trading relationships, and that’s the bit that I’m really focused on,” he sums up.

In his first few months in the role Nichols has spent a lot of time talking to brokers.

“I consistently hear ‘we like working with you, you have great people, it is a pleasure to work with you, but we could do more’. I’m interested in that ‘we could do more’ because that for me is the opportunity that we need to turn on,” he explains.

In Nichols’ view there is “no question” Zurich has grown “really well” in areas it was underweight in “but the growth ambition doesn’t disappear because of that”.

He underlines: “We absolutely should be poised for bigger shares of wallet with our broker population that we serve.”

New branches

This year, Zurich has already opened branches in Bristol and Leeds as well as adding underwriting expertise in Southampton.

“We are regionally well placed and we are not stopping. Having a regional trading relationship is really important,” he assesses.

Adding mid-market underwriting capability in London makes “a lot of sense” and could well be the next investment, he suggests.

“We will be standing back, looking at our distribution landscape, and saying where else geographically does it make sense for us to introduce an office with trading capability?” Nichols commits.

The second string to the expansion bow will also help in the mid-market space.

“We are poised to go live with a refreshed proposition this year, which will benefit massively in the lower mid-market sector, and which I can say we’re underweight in right now,” Nichols states.

The insurer has invested in behind-the-scenes technology for its digital platform alongside a mid-market simplification exercise with a modularised product.

“The bulk of the new proposition that will go live this year is in the commercial combined product, e-traded and digitally supported,” he reveals. “It is about reducing the complexity of the policy offering that we have.”

Brokers will not see new screens or have to go through any rekeying, he confirms: “This will be really simple from a broker point of view. We do not want to be getting in the way.”

Once emailed propositions reach Zurich they will be digitally loaded, enriched and worked on by underwriters. What brokers will see is a “refreshed product wording”, which can be delivered digitally on the same day in a manner that cannot currently be done.

And in keeping with the growth agenda: “They’ll see a revised appetite in the lower mid-market space. If I look at our regional footprint, I’d say that we’re brilliant in the mid-market. Perhaps we don’t go as far as we could in the lower mid-market sector at the moment. And this will give us an entry point that currently doesn’t exist.”

Career path

Nichols’ career path that led him to wanting to grow with brokers began at Norwich Union on what would now be known as an apprenticeship scheme. During his A-Level studies he had worked in the pub and restaurant trade.

You see all walks of life when you are serving behind a bar. It sort of gears you up pretty well to respond to most scenarios you get with the public.

“I go back to that time, and I think it taught me quite a lot because you see all walks of life when you are serving behind a bar. It sort of gears you up pretty well to respond to most scenarios you get with the public. It was a great experience,” Nichols recalls. 

On taking the insurance job, the plan had been to give it a year while deciding whether to carry on, go to university or go travelling.

“That first 12 months flew by and I actually found it quite exciting,” he says. “I didn’t really look back. It always felt like there was a fresh new challenge.”

Grassroots

His introduction to the market was in an administration role in the health insurance sector. “It goes back to an age of microfiche and paper files. It was a real grassroots [way of] starting in what administration looked like in the insurance industry in 1991,” he remembers.

After two years, he moved towards underwriting in property supporting a head office team, working mainly on high-net-worth business referrals from the branch network. Then in 1996 came a switch to a London unit for global brokers, but still serviced out of Norwich, for personal lines.

“In some ways, you did have to sweep aside some of our ivory tower rule books and just find solutions to those brokers that needed help,” he says. 

In some ways, you did have to sweep aside some of our ivory tower rule books and just find solutions to those brokers that needed help.

Heading it up involved working with delegated authority schemes, pricing and underwriting support. All of which led to him being part of the acquisition team of London & Edinburgh for eight months into 1998 looking at how to integrate the two firms. It was not the only secondment during his time at Norwich Union.

After spending a year leading high-net-worth business, he was added to the mergers and acquisitions team in 2000 to support the merger of CGU and Norwich Union working on organisational design and capacity for the regional business. 

“It was fascinating bringing all of those various businesses together,” he remembers.

Off the back of broking facing roles in personal lines and high net worth, where there “was never a dull moment in terms of the personalities”, came another key broker interaction – being in charge of the small business operational team after the CGU merger. The amalgamated company created small commercial underwriting hubs across the UK and looked at making trading more efficient.

“It was a precursor to the e-trading that you see in the SME space right now,” says Nichols admitting that for the market it was a bit foreign at the time.

The idea was in part to shift away from the heavy paper environments that the transactions caused.

“You could see there was a better way of doing things and that drives me quite a lot. You felt like you were part of exploring a better way of making insurance work,” he explains. 

However, the big switch came in 2004, as he then became the SME manager at Zurich on 1 February. It was a major decision for Nichols and involved relocating from Norfolk to Cheltenham to take up the role.

The commercial world

Having got his feet into the commercial world, Nichols says he recognised Zurich had a “really strong” proposition through its brand and commitment to e-trading, particularly the extranet. “It goes back to my desire for continuous improvement,” he says of the “good logical step”.

“I also relished the opportunity to own the profit and loss element of a particular account, which moving to Zurich gave me. The role I left behind at Aviva was largely operational delivery.”

He ran four SME centres, in Cheltenham, Sutton, Birmingham and Belfast, with micro accounts for shop, pub, restaurant, hotel, office and small property owners on the extranet and via phone quotes.

“The majority of it was e-trade, it was a really effective platform for its time.”

Three years later and the mantra was to the fore again with the new job of director of technical operations for general insurance. 

“That was looking at continuous improvement opportunities in particular,” Nichols explains, listing shared services and market facing elements among the equation.

Broking and claims

It was to hold him in good stead when he jumped the fence five years later to broking, a pivotal piece of the journey to his current post and a key factor in his belief of being able to deliver for brokers. Being chief operating officer at Endsleigh meant looking after the sales, service and claims centres, as well as the IT delivery. 

“There were so many learning points,” Nicols recalls, pinpointing managing margin on the insurance transaction and making sure that leads were generating income as being high on the list. 

He also spent nearly two years at the then Zurich-owned student insurance specialist as customer operations director. Part of the equation was making sure staff were “really focused on delighting the customer”.

Nichols says: “I explored everything about the broker insurer relationships at that particular time.”

It was at Endsleigh that he had his first taste of leading a business. For five months in 2015, he was interim managing director after the departure of Tim Holliday. Nichols always knew it would be a temporary assignment and says due to having “fantastic people around the table” it wasn’t a difficult transition to make.

With continuous improvement running like a vein through his career, after returning to Zurich a little later as UKGI COO in 2016 the focus involved procurement, premises and quite heavily featured automation.

We put more consistency around how we did it [claims]. We really did break some ground by enriching the handling capability with digital and data.

After which came the new lens: claims. The first attraction of becoming UK chief claims officer in 2017 was he recognised claims as “a moment of truth” for the product.

“Secondly, I saw huge opportunities to do things slightly differently,” he suggests. 

At the time all claims were being handled in a similar way.

“It was an opportunity create a fast flow around lower value claims, less touch points, faster closure out to customers when they need it, and then a real concentration on the technical skills where you can really help a customer in the major space. That didn’t exist before.”

Adding: “We put more consistency around how we did it. We really did break some ground by enriching the handling capability with digital and data.”

Nichols’ claims knowledge – he believes – will now enhance the brokers’ end-to-end experience with Zurich.

“The claim stint has allowed me to come into retail, and perhaps look at what we do through a slightly different perspective. Of course, it’s about the quality of the underwriting, the speed at which we can service brokers, our authenticity, competitiveness and cover proposition in the market.

“But I will hang onto that lens of we’re selling policies for a purpose. I don’t think I will ever leave that heritage behind. I look at it through perhaps a slightly different lens having had that experience in claims.”

One perspective that will not be lost when using these skills is the importance of the quest being for profitable growth.

£1bn plus business

Nichols has taken on a portfolio of personal lines, high net worth with Zurich Private Clients, SME and mid-market business that tops £1bn. In its 2022 results, the insurer did not release a figure for just the retail division. Property and casualty business overall had a combined operating ratio of 95.5%.

“I would never look to balloon the COR, because growing profitably is all about the sustainability of the business you create,” Nichols observes.

“When my time is right to move, I want to look back and leave something that’s credible for someone else to pick up. It will be about profitable growth, but it’ll also be about exploring the areas where we don’t currently trade and currently have an appetite. That will be the key to us continuing to grow.”

The COR was up year-on-year from 86.5%, but Nichols defends the performance.

“Against a backdrop of huge claims inflation, a really changing landscape, I think [the COR] is a really credible result. One that I feel really proud of because it compared well in the UK market and demonstrates that we do have a strong business here,” he counters. 

When my time is right to move, I want to leave something credible for someone else to pick up. It will be about profitable growth, but it’ll also be about exploring the areas where we don’t currently trade.

The inflation challenges have indeed been well chronicled across the market. In his view, there is still a squeeze on and an ongoing challenge.

“The rate of increase is starting to reduce is the way I would describe it, but I still see massive challenges around reinstatement in particular.” 

Driving growth

Accordingly Zurich is still moving rate forward. In the past few years growth has also been driven by teaming up with managing general agents. Under predecessor Martin’s guidance Zurich signed up to partner KGM Underwriting, part of Howden-owned A-Plan. The solus capacity five-year motor portfolio arrangement, which kicked in from January 2022, is worth more than £700m GWP. 

Zurich also struck a five-year deal with specialist agricultural underwriter AIUA in 2021. as it displayed increased appetite for MGA business.

Nichols notes that each MGA in the stable performs differently to mass-market personal lines, adding different capabilities and being “credible in their own right”.

“I don’t see us actively looking in the MGA [market] for the next 12 months or so,” he updates pointing out the relationships are still relatively new. “For me, it’s about making sure that the ones that we’ve got really do fire and that we are jointly learning.”

For all the technological and appetite changes, ultimately it is people that will deliver the growth. Across the regional underwriting network and SME centres there are around 600 members of staff.

When asked what his leadership style will be he responds: “First and foremost, I want to be a leader that listens because I haven’t taken away my excitement around continuous improvement. By listening you find opportunities to do things better. And that excites me massively.”

Inclusivity

In an industry that is known to have issues with gender diversity, Nichols leads a team that has 80% female leadership in retail.

“Anyone can quote the numbers of what their diversity looks like, but for me it’s the inclusivity that goes alongside it.

Inclusivity means listening to ideas and different perspectives, and doing something different as a consequence of having that.

“It just makes for a much richer business and a much richer place to work in actually.

“I love that element of the diversity of the team that we have in retail, and it does bring really fresh thinking and a different approach,” he maintains.

Appropriately enough for someone who started as an apprentice and has risen to the top, Nichols is a passionate advocate of Zurich’s apprenticeship scheme to bring “fresh new talent into the industry”, saying the programme has made “a real difference”.

Kick Start Mentors’ scheme

He is also the sponsor of Zurich’s ‘Kick Start Mentors’ scheme in partnership with five schools as part of its early careers programme.

First and foremost, I want to be a leader that listens because I haven’t taken away my excitement around continuous improvement.

The initiative has been designed to attract future talent from diverse backgrounds across the country. Eighty pupils have already signed up to be mentored by 24 specially trained Zurich future leaders who work in various business areas across the UK.

All of which circles back to where we began. The vision is to lead the team to growth.

“I want a continued look at our service proposition. I’m months in and see some tremendous things already done. I see tremendous opportunities to carry on doing more. There’s still a lot of opportunity for us in the market, and I just want to find the key to unlock that,” Nichols concludes.