A new driving force

It is often said the insurance industry could learn a lot from its rivals in the banking fraternity so it will be interesting to see how Ian Ormerod will utilise his banking background in his new role as head of distribution development at Axa.

Previously at Abbey National Bank, where he worked for eight years, Mr Ormerod came into the sector with no industry or insurance experience, although he did have limited experience of personal lines products that would naturally be sold through a bank.

Mr Ormerod joined Axa back in May 2003 and settled into the commercial intermediary arm where he was the area manager for Reading and Southampton.

He explains that for the best part of two years he spent his time 'cutting his teeth', learning about the industry; getting to know the brokers on his patch and driving the business forward. In March last year Mr Ormerod was appointed head of distribution development thus moving him out of an operational role into a strategic and support one - provisionally for the distribution division.

"As people are aware, there were changes across Axa back in February 2005 when Mark Cliff took over the whole of distribution. Traditionally, he had been the commercial director and within his team, Colin Calder headed-up broker development, which was designed to look at segmentation of the strategy that we have for commercial intermediaries and build a comprehensive support package that would really help them and us enhance our trading relationship."

Taking charge

The result of these changes was that Mr Cliff took over responsibility for personal lines brokers and corporate partners - he was already involved in direct - and created a new distribution development department, which Mr Ormerod now heads up.

He explains: "The principal responsibilities we have in distribution development include looking at our segmentation and distribution strategy; continuing to ensure we have a market leading support package and ingraining a sales culture across distribution - which was a new remit that was bought into that department.

"I think we have successfully embedded the changes internally. There were also early benefits for us such as the support package that Colin Calder had spent a lot of time creating now being really taken advantage of in the personal lines environment. What we have done over the last few months is to take the best from all of the departments and to build strength across personal lines, corporate partners and commercial lines from a support package perspective."

Mr Ormerod admits the new strategy also highlighted gaps; including certain aspects in corporate partners that have proved successful, which although they 'can't be adopted wholesale' could be worked on to help generate new areas of opportunity for intermediaries.

"We also needed some external blood to help us support the sales culture remit," says Mr Ormerod. "I took someone from Abbey, a past colleague of mine, called Paul Burton who is now our national sales development manager. He is currently responsible for writing our new sales programme and helping to drive through the cultural side of things, which is a very big play for us over the next couple of years."

According to Mr Ormerod the traditional insurance model, when viewed from a sales culture perspective, has meant insurers have perceived themselves as product manufacturers and have been reliant on the brokers, and their sales skills, to deliver those products to market and convert sales.

"Where we have missed a trick - even though we have become better at it - is managing those relationships with brokers in a similar way that you would with an end customer. We want to focus on them driving more revenue through their own doors and hopefully passing it onto us."

This all means that Axa will be concentrating on three main areas of change. The first is to look at core competencies and the expectations that it has of its sales people, with Axa now in the process of developing courses that will run alongside those competencies.

Every individual will then be assessed against those competencies before the introduction of training and development where that happens. The insurer will also shortly be introducing comprehensive sales management and performance management courses.

"The feedback we have tended to get from brokers is that they rate our relationship management skills very strongly. One of the concerns that comes through slightly is that a word that is often attached to us is 'nice' - which is great in many respects.

"But how assertive and structured we are at ensuring we drive value out of our strong relationships is questionable in some areas. The feedback we get from brokers would lead us to believe that we are significantly further ahead than the vast majority of competitors. However, the point I would make is that if we draw a benchmark within insurance we are using the wrong benchmark, as other market sectors are much more sales and customer focused. This is what we need to be driving towards."

Mr Ormerod comments that he has been astounded by the great deal of change on the broker market in the short time since he has come on board - a trend that he does not see changing.

He adds: "If anything this speed of change will only increase. Obviously Towergate's deal with Fusion has changed some of the dynamics. There is a real 'run to size' with many of the provincial brokers who feel they have to look to acquire to get to a significant size in order to continue to play long term.

"You only have to look at brokers such as Stuart Alexander and Kerry London to see the truth of this. On the flip side many have been surprised by the resilience of the smaller brokers. But undoubtedly there is still a great market out there whatever size of broker you are."

IAN ORMEROD - BIOGRAPHY

- Mr Ormerod joined Axa in May 2003 as area manager for the commercial operation and was then appointed as head of distribution development in March 2005.

- Before joining Axa, Ian spent eight years working with the Abbey National, mainly in marketing and regional management.