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Broker Profile: Martin Hughes, Hub International

Broker Profile: Martin Hughes, Hub International

Martin Hughes is executive chairman of Hub International Ltd. He will become chairman of the Council of Insurance Agents & Brokers during the group’s Insurance Leadership Forum in October. He recently spoke with Mark A. Hofmann, a Business Insurance correspondent, about the insurance marketplace, the evolving role of brokers and the Council’s agenda.

Q: How would you describe the current property/casualty insurance market from a broker’s perspective?

A: Right now I’d say it’s a very stable market. It’s the kind of market I think that most brokers actually prefer because rates are very modestly going up, but our clients are doing well so business is up, and it’s a welcome relief from the years of a soft market that we’ve gone through.

Q: How has the current market affected the role of brokers, or are your clients looking for new services from their brokers?

A: I don’t think the market has affected the role of brokers, but I do think that the role of a broker is evolving, is changing, and a client’s expectations of their broker are changing fairly dramatically. People are much more interested now in having subject matter experts made available to them, people who really understand the discipline around their business, and they expect you to have those subject matter experts available. And they also expect you to be able to provide information, have access to technology and be able to talk to them about their exposures in ways that just didn’t exist in the past.

Q: That leads to another question: Where do you see growth opportunities for the broker system?

A: When the Affordable Care Act was passed, I really thought that’s going to be the end of our employee benefits business, it’s going to kill it. And then when it passed and many of us believed that these private exchanges were going to explode and that those people who had the wherewithal and were in a position to make the investment in those private exchanges were going to really benefit, we were all wrong. That really never materialized; corporate America never, ever embraced the private exchange concept as we all thought they would. But, having said that, we made substantial investments in our employee benefits business because we did believe that that’s where it’s headed. We never regretted making those investments because our fastest growing business, in fact, is our employee benefits business.

Q: Are there any other growth areas for brokers?

A: One of the things that happened in the brokerage business over the years is many brokers walked away from the personal lines business, they had back in the ’90s and the early 2000s. Many of the big brokers walked away from personal lines and small commercial because they didn’t think they could make any money at it. We believed that there was opportunity to make money there if you were capable of being efficient while still being able to provide world-class coverage to your clients. That opportunity has mushroomed and technology’s making all the difference in the world in that arena.

Q: What impact is insurtech having on brokerage sector?

A: I think making us stretch our minds and making us make investments that maybe we would not have been willing to make had we not seen this threat.

Q: What are the biggest challenges facing the brokerage sector?

A: There’s a massive amount of consolidation taking place. And that is allowing brokers to make the investments that I suggested earlier need to be made and broadening their sphere of influence. I think the challenge for many brokers is they aren’t going to be able to make the investments and they aren’t going to be able to compete.

Q: What can be done to encourage young people to consider a career as an insurance broker?

A: I don’t know a whole lot of people who have come into the industry because it was their dream. It certainly wasn’t mine. I came into it by accident, and a lot of the people I know came into it by accident. But I’ve always been a believer in finding ways to attract the young people into the business and training them the minute I became the owner of that brokerage to make sure that we began to invest in young people and we started to train people.

And I think the Council today has embraced that mission and they do a fabulous job of getting that word out — financially supporting the opportunity that it presents and helping us identify and train young people. So it’s always been a challenge, it’s going to continue to be a challenge, but I think the Council has really provided a tremendous relationship in this arena and helped those young people into the business.

Q: What Washington issues are of concern to brokers?

A: The Terrorism Risk Insurance Act has been on the map for some time. We needed to be concerned about it, and I know (Council Senior Vice President) Joel Wood and his team are already beginning to engage policymakers in the administration and on Capitol Hill to talk about it. One subject that never seems to go away is single-payer health care. To me, employer sponsored health care plans is kind at the backbone of American industry and if anything disrupted that, it could create an incredible amount of havoc in both the insurance brokerage business as well as in the health care business. So, that’s something we pay very close attention to.

We are a microcosm of American business because our antennae touch almost every industry in the country, and I would like to see our leadership begin to embrace the concept of civil discourse. We need to be able to have civil discourse in this country, we need to be able to disagree with each other and have a healthy debate without despising each other.



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