Tokio Marine Highland: Driving an audacious plan for change
A mainstay in US-based property and casualty underwriting (P&C), Tokio Marine Highland has nurtured a storied industry reputation based on the breadth and quality of its speciality risk management solutions, such as private flood, construction and lender-placed products.
Originally founded as WNC Insurance Services in 1962, Tokio Marine Highland recently opted to rebrand in order to capitalise on the brand prestige of its parent company Tokio Marine Kiln (itself part of Tokio Marine Holdings), which completed its acquisition of WNC in 2018. “It's really enhancing the reputation that we’ve already built as WNC,” explains Joshua Clifton, Vice President of Marketing and Communications. “We see this as a great opportunity to enter new markets, attract talent, and seek new acquisitions and capacity partners.”
At the helm guiding the company through this exciting time is Patrick Blandford, CEO, who originally joined in 2004 as a board member and took on the CEO role in 2018. Characterising his role as assembling the best team possible and overseeing Tokio Marine Highland’s overall performance, Blandford emphasises that achieving the dual objectives of digital transformation and “to be a good company” (the official Tokio Marine philosophy) remain his top priorities. “I saw [at Tokio Marine Highland] the opportunity to preserve a very strong entrepreneurial culture, but one that is backed by the strength and resources not only of Tokio Marine Kiln but also the broader Tokio Marine Group. This has been the most rewarding challenge of my career so far,” he says.
Previously involved in other aspects of finance prior to his present appointment, particularly private equity investing, Blandford states that his background gives him a unique perspective that helps guide Tokio Marine Highland’s strategic direction. “Successful private equity investors are able to understand market cycles, identify pockets of opportunity and get in front of risks. There is a natural sense of urgency when you have a three to five-year expected hold period. The beauty of our ownership is that we have a very long horizon but are still driven by that sense of urgency.” This experience has proven particularly invaluable over the past 18 months when a taxing blend of shifting customer expectations and COVID-19-related market disruptions conspired to change the entire insurance sector.
Tokio Marine Highland prides itself on a strict operational focus within highly specialised P&C niches. Now holding a leading position for nearly three decades, the company is experienced at exploring new lines of coverage within these parameters and swiftly introducing a team of proven underwriters empowered with strong data resources and digital tools. "We are fortunate to be owned by our principal risk partner. It is natural that we put sustained underwriting profitability ahead of everything we do," explains Blandford. “We favour niche markets where we can establish a leadership position by understanding them through the customer’s perspective.” This approach makes Tokio Marine Highland’s mindset comparable to a startup, albeit reinforced by an established presence in the market that smaller companies would not possess.
The relentless focus on customer outcomes is in recognition that service expectations are changing, a key observation in a traditionally conservative industry. Although outside of insurance, tech leaders like Google, Apple, and Amazon are rewriting how customers view modern business experience, and Tokio Marine Highland is determined to keep pace with the change. “Over the last 18 months, insurance has proven to be a very resilient industry that is attracting even more capital and therefore more opportunity but a different set of challenges”, says Nirav Shah, Chief Analytics Officer. “Newer capital sources have very different expectations when compared to traditional providers. Therefore insurance markets need to be a lot more agile to make the most of the influx of non-traditional capital into the marketplace.”
In this new market, ‘the experience’ of a company has become a strong metric for quality and competitive differentiation. Kiran Achen, CIO, believes that driving Tokio Marine Highland’s wholesale digital transformation will be crucial for pursuing this new focus; advantages gained elsewhere will be fleeting. “For me, the insurance industry is the last frontier that hasn't yet been disrupted. There is now an opportunity for carriers like us to partner with insurtechs, hire the right talent, and actually disrupt the industry from within.”
Tokio Marine Highland’s digital transformation journey began in earnest in early 2018. The first step, according to Blandford, was shaping the leadership team and assembling resources in order to create a foundation of expertise and technical infrastructure. Unlikely assistance came in the form of COVID-19, which, despite its obvious negative impact, actually helped concentrate the company’s efforts. “I think of 2020 as the year that we turned the corner,” he states. “The unfortunate environment enabled us to spend less time-fighting fires and more time bringing our larger team into the transformation efforts.” Centering the change around robust data-driven insights, exceptional client interfaces and automated operations, Shah and Achen state that a special emphasis was placed on the cloud, low-code/no-code platforms, open-source, smart systems, AI (artificial intelligence) and ML (machine learning).
“We’ve rolled out a new digital platform housing our difference in conditions (DIC) product,” says Tim Reilly, Senior Director of Digital Distribution. “Essentially, this platform enables straight-through processing for earthquake and landslide coverage. We’re also in the middle of a soft launch for our new flood product, which will be housed on the same platform.” In its quest to unlock additional value for its customers, Tokio Marine Highland’s approach to product development is exploratory and empathetic to their needs. “Our customers are looking for products to fit their lifestyle: they're more conscious of where and who they choose to place their business with. We need to be flexible with our tech stack and ensure our products and services complement those already being used by other ecosystems.”
Although Tokio Marine Highland has the expertise and technology to drive its transformation roadmap forward, Blandford is under no illusion that the end is in sight, “this is a continuous journey.” Therefore, he considers that the ultimate success or failure of the company’s endeavour will be determined by its cultural cohesion and the adoption of an inclusive and agile operating philosophy. Separating the business into dedicated squadrons, Blandford explains that each is encouraged to experiment, learn and improve on its own terms. Whether focused on product development, how the company collaborates with its partners, or diversity and inclusion, Tokio Marine Highland is continually exploring new ways to reinvent itself. “Obviously, key results have to align with the objectives, but every 13 weeks, we're looking at what has changed both internally and externally.”
In 2021, the company is fully embracing the "new normal" in more ways than one. The launch of a new fine art division headed up by industry expert Christiane Fischer (a hiring "coup," as Blandford describes it) provides an exciting opportunity to reconfigure Tokio Marine Highland's digital platform even further. "What you see in 2021 is the execution of our digital playbook," Blandford says. “You'll see our broader product portfolio apply the Tokio Marine Highland digital offerings.” Safe in the knowledge that through a united and focused culture, the company will prosper, he calls for setting “audacious” goals that push the envelope of modern insurance and keep Tokio Marine Highland at the cutting edge where it belongs. “We have to enjoy our success and treat every setback as a learning opportunity. We also need to remain humble: our competitors are highly skilled, well-capitalised, and they're moving quickly.” However, by prioritising experimentation, corporate agility and customer-centricity, Tokio Marine Highland has the capacity to move even quicker.
Reasons to Celebrate
Although 2020 has been a difficult year, Blandford still praises Tokio Marine Highland’s leadership and employees for providing so many reasons to celebrate nonetheless. Among his cited highlights are:
- The strong underwriting performance of the private flood team in spite of record hurricane activity.
- Achen and Shah’s respective teams in building the company’s data platform, ‘The Ark,’ capable of providing higher quality insights to underwriters.
- Recognised as one of the best places to work in insurance.
"I missed the in-person interaction for much of 2020 and 2021, and it definitely made our transformation effort more difficult. I’m thrilled to be working side-by-side with the team again, and you can see it in the velocity of our accomplishments."