Without Limits

Gary Head tells John Watson why he's opened up Hiscox's PI book to a whole new market

Gary Head very nearly didn’t get started on a career in insurance. Straight out of Nottingham University with a physics degree under his belt, he was offered a job making specialised lensing components for use in high-powered lasers and imaging systems.

But having previously spent a gap year in Australia, with jobs including selling aftershave while dressed in a morning suit, Gary knew that he wanted a career focused on working with people, not things. A friend suggested insurance as a sociable industry where people skills were appreciated and, half a lifetime later, Gary is now Professions Underwriting Director at Hiscox.

His role today is to help steer Hiscox’s professions commercial book in a new direction, charting a course away from traditional professions such as lawyers and accountants towards a wider audience of what Gary calls “brain workers”. Gary says: “We’re talking about anyone who does a job that means they take a shower in the morning before work, not in the evening after work.

“We are keen not to hamstring brokers with a preconceived concept of which jobs fit or which do not. In our view, the emerging professions are any knowledge-based industry, ranging from interior designers and life coaches to seismologists and process-mapping consultants.” Gary emphasises Hiscox’s flexible approach and encourages brokers to come to him with ideas for developing new markets.

Damage control

There are tens of thousands of sole traders, modest partnerships and small businesses in these knowledge-based industries and Gary feels most live in naïve ignorance about the professional indemnity risks they face. He says: “Directors and managers do not realise that their own livelihood could be removed by one simple mistake.”

For example, half of all IT consultants still do not have any professional indemnity cover, despite a string of high-profile court cases over projects that have gone off the rails. The penetration in other sectors is even lower.

Gary says: “The thing that excites me is the potential size of the market. If I didn’t work for Hiscox, I can guarantee that my mum, dad, brother and wife, who all work in knowledge-based jobs, would not have a PI policy between them. No one in insurance has ever approached them or sent them a letter suggesting they take out cover, so the opportunity for growth is there. In commission terms, this could mean up to £2,000 over ten years on a continuous policy.”

However, he admits the blame for not developing the market lies as much with insurers as with brokers.

“It would be easy to sit here and say brokers should be more imaginative in marketing PI,” says Gary. “But the reality is that we haven’t given brokers the tools to enable them to unlock the potential of this market.

“Hiscox has to lead the way and come up with tools like INScribe and the marketing toolkit so that brokers can get the message out in a cost-effective way,” he says. “It has to be productive for them and it has to be profitable for them.”

Another of Gary’s goals is to understand consumers’ needs better so Hiscox can promote the benefits of PI in a more compelling way, helping brokers to unlock profitable growth. “We speak in a foreign language in the insurance market with jargon such as PI and EL,” he says. “An interior designer who has just set up in business doesn’t have a clue what we are talking about. We should talk more about simple business protection. There is a huge opportunity for those who can market this correctly.”

The opportunities in emerging professions stand in contrast to the fiercely competitive price war that has taken place in more established PI markets.

Hiscox has now ceased writing solicitors’ PI and is cool on insuring many traditional professions. “We exited the solicitors’ market for one very simple reason: we believe the prices being charged are not profitable,” says Gary. “If we felt that about other areas we’d do exactly the same. If you price business at even £1 under where a risk should be, then eventually you will go bust.”

Outside the office, Gary has a hectic family life in Berkshire, with four children aged between three and 12. While he indulges his love of technology by reading scientific writing when he can, Gary admits that after years focusing on PI and not physics, even his eldest daughter’s science homework is now challenging!

After ten years at Hiscox, what keeps driving Gary forward and turns an ordinary day at the office into a special one? “Seeing our staff develop and grow in their own careers,” he says. “We have the strongest professions underwriting team in the market by a country mile, but they are all still growing and learning. It is great to see this process working, to see them winning new business and to have your perceptions challenged by your own team.”

Who else needs cover?

Charity work and volunteer roles are an area where the insurance market has been slow to adjust to changing needs.

Gary says: “When talking about emerging professions, I include voluntary roles such as school governors, and any trusteeship and any trustee obligations.

“There are some big decisions that have to be taken and, as a school governor or charity trustee, whether you took the decision personally or not, you are still responsible for the consequences of that.”

In May, Hiscox launched a new range of packages aimed specifically at charities, clubs and associations. These aim to give protection for these organisations and their officers against liabilities ranging from employment issues to officers’ negligence.

Gary says: “In the US, the reason you get very little voluntary activity is that before people volunteer they want to see a list of the indemnities and the insurances that are in place to protect them.”

He fears the same could be happening here, as individuals worry about their personal liabilities.

He says: “If I was asked to be a trustee for my local sports association, the likelihood of someone suing me for negligence would be slim. However, if I could buy a £20 per month sleep-easy policy that would give me indemnity protection, I would be more than delighted to take it up.”

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