The third degree

One year on from rejoining the operational fray as the head of agency at Oxygen, Sian Fisher is clearly relishing starting, in many ways, from scratch. The reasons why she became well-known during her time at Hiscox are still evident and, with a clarity gleaned from having had time out, her many convictions about the value of insurance have been underlined.

Prior to her first entry into the insurance industry in 1984, Fisher says she studied law at university, not because she wanted to become a barrister but because of the harder-edged thought processes and robust analysis it required compared with arts degrees. She completed one English-studies module, of which she says: "I really enjoyed studying literature, but many 18th- and 19th-century novels are dominated by fear - fear of falling ill or fear of destitution, but a great deal of the fear in life has been taken away by pensions, benefits and protection schemes, which are all types of insurance.

Perception

The depth of Fisher's conviction regarding the value of insurance is made plain from the outset. She continues: "I have made presentations in schools and to graduates and it seems incredible to me that an industry that deals head-on with the most incredible, exciting and terrible risks to society is perceived to be so unimportant. The insurance industry is second only to the medical profession in setting the great gap that separates 20th-century society onwards from the 18th and 19th centuries."

While obviously passionate about the industry, talking almost in terms of it being 'society's guardian', Fisher has no desire to give up her day job to champion its benefits to rectify the fact that it does not project a good view of itself externally.

She explains: "In my view, the best way to change or improve things is as a practitioner on the inside. I do not think it is true that a greater perspective can be gained from being stationed on the outside as it is almost always the case that the way things should be changed or enhanced is by degrees from within. That is why I got involved in setting up training at Hiscox - to give young people the opportunity of structured development."

After two years as a reinsurance broker, Fisher began what became an 18-year stint at Hiscox developing her skills, knowledge, reputation and, latterly, the business. And, in 2001, 17 years after leaving Oxford, she became the managing director of Hiscox Insurance. However, having attained this high position it was relatively short-lived. "While this was enormously satisfying and was an invaluable learning experience, it can become lonely when you are in charge of a business," she explains.

After some time out to study for her Master of Business Administration qualification in the US, her desire to re-enter the market soon began to get the better of her. Shortly after that, she was head-hunted for her current position by Oxygen chief executive Nigel Barton personally. But, before taking the plunge with Oxygen in October 2004, she found a new channel for her pragmatic approach to pushing for change from within when she joined The Chartered Insurance Institute as vice-president in July.

In the time she took out after Hiscox, Fisher says she observed what was changing and how rapidly things were progressing, which underlined to her the need for professional examinations that keep pace with change and development in the industry.

"The government phrase 'fit for purpose' is absolutely right, which is why the CII aims to provide modules to assist all individuals - at whatever level - to do their job better which is a challenge in an industry that employs around 200,000 people," she says.

Through her work at Hiscox, and latterly with the CII, Fisher is known as a keen exponent of fresh talent and new ventures to the industry. It is perhaps surprising then that, concerning the view that the Financial Services Authority requirements are a barrier to new entries, Fisher could not agree less: "It is completely wrong to blame the FSA for this and to say it is stifling entrepreneurialism," she says, adding: "All the regulator is trying to do is hard-code what most would agree is best practice. Doing things properly is inevitably more expensive, more capital-intensive and time-consuming. In the past, two senior brokers would leave a firm, rent an office around the corner and get going, and would probably be there five or six years later. Now there are more requirements - but actually it is right that there are. While there is the view that acquiring a firm to re-engineer it would be easier, it only exchanges one difficulty with another because people are endemically resistant to change, so it is better to start from scratch."

About the challenges facing new ventures, she says: "If a new company is going to put out into the market it has to major either in products, service and distribution or as a low-cost operator. If they are any good they will succeed. After success in one area there will be the temptation to move into other areas, but to do all three well is incredibly difficult and those that do are to be applauded."

In terms of starting from scratch herself at Oxygen and what she would like to be known for, Fisher says: "I am proud of what I was part of at Hiscox. The standards Robert Hiscox set suited me perfectly. These were basically to be straight in all dealings with customers and to treat your staff fairly and there is nothing fundamentally I would do differently as far as business is concerned."

She adds: "Having built up a reputation and standing at Hiscox, moving to Oxygen was quite a shock; there is nothing like starting up a completely new venture to bring you crashing down to earth. It is a good test of whether you have really been an effective part of the industry and it is an experience I thoroughly recommend."

A sustainable model

So was Oxygen chosen at all because its model, which balances underwriting and broking, is more sustainable than a traditional broking firm? "No, not because it is more sustainable. There were personal reasons plus Nigel Barton is very credible. What he set out to do was form a business with internal business transparency, high achievers and efficient processing, which is a hugely worthwhile aim. The idea of keeping the agency separate from broking to allow customers to be clear on what they were paying for was months before Spitzer."

In terms of the eventual impact of Spitzer and the spotlight this has thrown onto how brokers are paid for their services, she adds: "The issue of understanding what service brokers are giving and how we are remunerated for it is undoubtedly going to be more important but I do not anticipate a huge cultural change as a result. When there is a multiple chain with, for example, retail, wholesale, an underwriting agency and another carrier before the client gets the product, this lends itself to complexity and misunderstanding. But those that ran good businesses before - and there are many great retail brokers - are still good businesses."

It is not surprising then that Oxygen prefers to use single carriers to avoid this kind of confusion. However, Fisher says this does not preclude Oxygen from entertaining the idea of multiple carriers in future.

In response to the development of SME commercial direct and possible development of technology, which could mean larger business goes direct in future, Fisher offers a daunting scenario: "There have been a lot of bad technology solutions and some horrendous ones - not just in insurance but in government and other sectors. However, when adopters get it right, coupled with the right model and process, the effect of transforming business is self-evident. Technology in insurance has done this to an extent but it is only currently able to do large volumes of business, not complex business. It is not inconceivable then that, if the right technology is developed - and with the right process and business model - further transformation is possible."

However, Fisher adds that, because the industry is uncomfortable with highly automated technology solutions, this is likely to be a very gradual process.

She continues: "When I started at Hiscox, if some liability cover was required with a household policy, a separate accident policy had to be purchased. Packaging these eventually grew into high net worth and the same is happening now in SME commercial. At Hiscox we also introduced a commercial combined with professional indemnity package, but brokers were resistant because they would say they had facilities and deals with other insurers, or delegated authority to write the additional cover. The move toward the levels of acceptance there are today did not happen overnight, even though the package option was better for the customer because it saved them money."

Greater collaborative effort

Fisher also explains why she firmly believes there needs to be greater collaboration between provincial firms and the London Market: "Lloyd's and the provincial markets are two extremely effective models going back hundreds of years. Lloyd's is more opportunistic and turns out blocks of business and the retail market is more about customer service and volume. Lloyd's seeks high-exposure and high-margin business and is very different, but both models hanker after each other.

Lloyd's lacks spread as it gets an uneven amount of risks at different times. At the moment it is writing a lot of US medical malpractice and is able to charge high margins. Eventually, the domestic industry will get it together and be able to charge lower rates. The problem for regional or retail brokers is there is a lot of innovation and experience that only resides in the London Market. Provincials have two options: to set up a Lloyd's broker or go wholesale.

"One of the things Oxygen is keen to do is use knowledge of both markets for products that are not easily accessible such as employers' liability and public liability. When the EL crisis hit a couple of years ago our main underwriter, Eric Silk, had the ability to help a lot of people, but he could have helped a lot more if they had known him. So there are mutual benefits in both markets getting together but it is the case that there are ingrained practices and behavioural habits that cannot be changed quickly. It takes people to be determined and willing to play a part on a long-term basis to make real progress."

"It is an issue because both sides need to do more business together. I am well-known as one of the first people to produce a 'product'. Now everyone is doing it but it took me six years for the idea to be accepted - and this is quite common.

"It does not matter if this should have been happening 50 years ago, you have to work at the rate of change people are able and willing to go at. But if you do not go step-by-step, it will exhaust you; keep taking steps and don't get despondent, even though it may take many years. This is a massive industry but it has been very fragmented because it is personality-based and incredibly complex."

Emerging threats

Concerning the next big threat to the industry following the onslaught from banks and supermarkets, Fisher says: "Retail banks and retail financial services companies do not see a great distinction between personal lines and commercial - so that is one to watch - as is the power of service providers such as Axiom and Capita. These have evolved massively in the last 10 years, as they now provide vast parts of infrastructure and services to the industry. Whether they are a threat depends on whether they want to stay as service providers or just tack on a few products."

It is clear that, while Fisher is still at the early stages of running a start-up, her determination and desire to do something of long-term value will be focused not just on her job but on playing a wider role within the insurance industry as one of its staunchest advocates.

CV

October 2004: founder member of Oxygen

2004: left Hiscox to study at Harvard

2001: managing director, Hiscox Insurance

1999: director of underwriting, Hiscox Insurance

1997: head of commercial lines, Hiscox Insurance

1990: line underwriter for professional indemnity, Hiscox Syndicates

1988: underwriter, Hiscox Syndicates

1986: trainee underwriter, Hiscox Syndicates

1984: reinsurance broker, Marsh.