The Interview: David Williams
We talk to Bristol-born David Williams, managing director underwriting and technical services at AXA Insurance, about the latest industry trends, lockdown, labour rates and the “mighty” Bristol Rovers.
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Please describe your career so far.
I started as a trainee underwriter on 11 August 1980, so a major landmark is coming up in a few months. While I’ve always worked for what is now AXA, I’ve done a variety of jobs and have moved round the country – casualty underwriter in Bristol, development underwriter in Maidstone, chief commercial underwriter in Haverhill, reinsurance manager in London, then managing director claims from 2003 before coming back to underwriting in 2011. I’m now MD underwriting and technical services for AXA in the UK.
What did you want to be when you were at school?
Ignoring the brief period when I wanted to drive for Team Lotus, I wanted to be a scientist. I also had a fascination with how things grow so was going to combine the two. My dad had done a seven-year apprenticeship in motor vehicle refinishing and I used to help him prepare cars for spraying, rubbing down filled panels and the like, but I was never very good with my hands, so thought it better to pursue something where I relied more on my brain.
What first inspired you to get into insurance?
I was just looking for a job of any description to tide me over for a few months until I went to university. A friend was applying for a trainee underwriter role and he told me enough so that I could bluff real interest, and that got me the job. Once I got into it I found to my big surprise that I actually enjoyed it.
What represents a typical working day?
As I’m speaking I have spent the entire week poring over the various wordings that apply in respect of business interruption, trying to establish what is and isn’t covered on each variation with regard to things like “infectious diseases” or “denial of access”. Then it was on the phone explaining that detail to our own staff and to our insurance brokers. In an attempt to stay sane, I’m trying to go for a long walk with the family every day, and also I’m cooking – the one thing that seems to distract me from other things. I love food.
Pre-lockdown most days I would commute into our London office which is close to Liverpool Street Station and spend most of my time in meetings, either internally, or with our brokers and customers, or with industry bodies and government organisations. I get wheeled out to represent AXA a lot as I have done so many jobs I can cover most things. I lead our work on Connected & Autonomous Vehicles (driverless cars) and get involved with a fair amount of work trying to second guess the future of mobility and what products and services our customers will want, and how we can deliver them.
What is your idea of a perfect weekend?
It would be great to go skiing, but that’s a once or twice a year thing. Listening to music is something I love to do (I still go to gigs and download several albums a week), plus playing with technology or watching the “mighty” Bristol Rovers. My two boys (aged 12 and 14) won’t go to Rovers matches with me very often these days (I think it was losing to Braintree Town away that pushed them over the edge), so taking two Tractor Boys to watch our local Ipswich Town is a good compromise. Trying some new food or just an old favourite like a curry, or even a pie or pasty at a football match would also be an important feature of my perfect weekend.
What are the best and worst things about your job?
I genuinely would say the people are the best thing, but that’s as much the interaction as the individuals themselves. I thrive on influence and being able to input into things that change or create laws or trying to point our industry in the right direction. I also get to see some great cars in the driverless space, from testing autonomous pods at the old Olympic Park in London, to crash tests in Switzerland and Formula E in Paris.
The worst aspect I would say is the form filling. I don’t think people appreciate how heavily regulated our industry is, and while I absolutely see why these regulations are needed, I wish the admin side of it could just magically happen, leaving me more time to do the interesting stuff.
What are the main challenges facing insurers today?
Keeping pace with new technology. I remember when “modern materials” were an issue and we struggled to know how to repair things. Now we are in an environment where parts costs are rocketing because of sensors in headlamps and the like, and the skills and equipment needed – whether it’s to calibrate ADAS systems or deal with the increasing number of electric vehicles – are in short supply.
How has the relationship between repairs and insurers changed over the years?
While this varies tremendously across the market, I see less of the relationships there used to be between our motor engineers and individual bodyshops. Networks now dominate and the ridiculously competitive nature of the motor insurance market (only making money three years out of the last 15) drives a focus on price more than is sometimes healthy.
Bottom-line discounts and low labour rates are anathema for repairers. What’s your view?
Contrary to the view of some anonymous keyboard warriors on Twitter, insurers understand that without repairers we are completely screwed, we need each other and should work together to better understand each other’s problems. Low rates are out there, and if you want to compete selling motor insurance you need to be able to match the repair costs of your competitors. I would love the idea of people choosing their motor insurer based on the quality of work or repair solutions offered, but it just doesn’t happen. People will change insurer at renewal to save 50 pence, and we can’t ignore that. I think greater transparency would help, and while controversial, labour-only deals with a sensible margin built in could be a part of the solution. The problem is the need for investment to prepare our partner bodyshops for the repairs of the future; you can’t do that on a bare minimum hourly rate, so that needs a different solution.
How will sustainability alter the way insurers and repairers do business?
I really hope green parts – or more accurately, perhaps, second hand, pre-loved, reconditioned parts – are a key part of the future. How come we all support the idea of recycling and saving the environment, but not when it comes to an insurance repair of a seven-year-old Ford Mondeo? Do we really need a brand-new OEM part? We wouldn’t opt for new if we were paying for it ourselves, so maybe we should stamp on the scaremongering from those with a vested interest (I’m aware of the margins some make on new OEM parts), while also giving sufficient margin in the hourly rate so the money doesn’t have to be made up elsewhere. Environmental regulation is definitely on its way, so I suggest we get with the programme before something is imposed on us.
What innovations are we likely to see in the next 12 months?
There is so much going on I almost don’t know where to start. In terms of the route to truly autonomous driving, high-end [Society of Automotive Engineers] SAE Level 3 vehicles are available and will start to be shipped (a Tesla is still officially only Level 3), combined with even greater penetration of ADAS features hopefully further improving road safety. While “only” 1,800 people die in road accidents each year in the UK, road accidents are still globally the biggest killer of males under the age of 25. Some 1.2 million people died on the world’s roads last year, so supporting the various Road to Zero and Can the Crash initiatives is a key factor. We may be exiting Europe, but before we go there will be a raft of regulations about mandatory equipment to be fitted to all new vehicles.
What will be the defining trend for your business?
How we respond when we come out of lockdown, and that not just us as a business, it’s the wider UK economy. If the economy does well, so do our customers, and therefore so do we. We also have changed many things to cope with the difficult situation we find ourselves in, when this is over, and we mustn’t go back to the old way of doing things unless that remains the best way to do things. We have suddenly managed to get technology to do things we thought were beyond us. We have over 8,000 people in our business alone, now working from home every day – do we really need to drag people into London for meetings, or are there ways to make better use of our time and provide everyone with a better work life balance?
What was the first car you bought? What do you drive today? And what would be your money-no-object dream motor?
My first car was an early 1980s ex-fleet Ford Fiesta, one year old with 42,000 miles on the clock. I drive an Audi A5 Quattro 3-litre diesel most of the time, but we also have a Volvo XC90 Hybrid which is an impressive bit of kit, and very safe. Money no object? A McLaren P1 or a Ford GT, though I have been looking at the Porsche 356-inspired Westfield Chesil Speedster, which is probably more my price range.
What achievement are you most proud of?
I got the Chartered Insurance Institute’s model constitution changed to be fairer to women in 1996. Its still a very male dominated industry but I like to think I did my bit to start some change. It’s probably best to not go into too much detail about what and how I got it changed as that was a painful process to move from a position no right-minded person could support these days. A more recent high point was being quoted by the UK government when it launched its driverless car legislation (Automated & Electric Vehicle Bill) alongside the then transport secretary.
What would you do differently if you had the chance?
I’m really pleased with what I’ve achieved and, in my life, I have a lovely wife and two children I couldn’t dream of being without. I’m content, so I don’t spend time thinking about what might have been. Well, apart from I should have sold those few shares I have before the virus crashed the stock market. I could have been more “diplomatic” at times, particularly when I was younger. I know I’ve upset people by being too direct, but you learn over the years that it’s not just about getting things done, how you do it is as important if not more so.
What will be the immediate and long-term impact of coronavirus?
The drop off in miles travelled and therefore accidents happening might appear good news, but the damage it can do as income dries up for all aspects of fulfilment is a real worry in the short term. Parts availability is another area of concern, but to a degree we had anticipated that sort of problem, albeit we thought it was going to be caused by Brexit. Longer term it’s difficult to say, depending on how long we’ll be under lockdown. How damaged will supply chains be? I certainly think there will be more people working from home more regularly, so we should all anticipate an impact on turnover.
Where do you see the industry in five years?
Total motor insurance premiums beginning a massive reduction due to a combination of safer vehicles, fewer accidents, and greater use of car sharing and mobility as a service. Other products and services having to be offered to fill the premium shortfall, but hopefully a greater interaction with our customers and a better reputation as a result.
What advice would you give to your younger self starting out?
Recognise what you are going to do career-wise earlier and commit to it. That way you will seek to understand more, and enjoy it more as a result. You spend more time working than doing anything else (other than maybe sleeping for some), so make sure you do something you enjoy – or find a way to enjoy what you do.
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