Creative destruction: Howden’s APAC CEO on a bumpy first 12 months in post

COVID-19 has changed the game for businesses and insurance across Asia-Pacific, says Howden’s new regional chief.

Paul O’Neill joined Howden Speciality as chief executive officer of the Asia-Pacific region in May 2020, before it rebranded from RKH Specialty. At the time, the UK and elsewhere remained in lockdown and as a result of travel restrictions, O’Neill didn’t get out to its main regional hub in Singapore, where he’s now based, until July last year.

It was a difficult time for everyone, but particularly perhaps for those in Howden, still adapting to the recent decision of owner the Hyperion Insurance Group to unite its retail business with the RKH specialist broking units under one brand.

Despite a challenging start, however, it’s an exciting time for the business and the region, according to O’Neill. He sat down to discuss the company’s plans and the outlook for the market with Intelligent Insurer’s Re/insurance Lounge, the digital hub for interviews, debates and panel discussions.

Shifting eastward

“The energy you get from visiting and meeting people in their home countries is irreplaceable,” O’Neill said. While the industry might have travelled too much in the past and has coped well enough with virtual meetings, he is keen to get out.

“Quite honestly, as soon as the opportunity arises to start travelling, I’ll be the first one on a plane to go to see clients,” he added.

Those travels are likely to take him to a growing number of countries. As well as its main Singapore base in the region, the business has offices in Hong Kong, Taiwan and Australia, as well as licences in China and a minor shareholding in South Korea. In a region stretching from India to New Zealand, O’Neill is keen to expand to other countries, too.

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That will coincide with new products as well. Until two years ago, the business only had one line in the region: international property. It’s since added marine and natural resources. As it expands geographically, it will seek to add new lines which will vary across the region.

“There’s different economic development across the region which provides different opportunities,” said O’Neill. “You can’t compare North Asia to South East Asia or South East Asia to Australia and New Zealand—or any of those to India.

“You need to understand the dynamics in each country, how you can access those markets and how you can bring your expertise to the specific challenges each faces.”

The opportunities may vary but they are substantial, according to O’Neill.

“One of the interesting things about this part of the world is that the economic weight is moving east, so we see significant gross domestic product (GDP) growth across the main economies of China, India and Indonesia.

“That will result in increased demand and increased manufacturing, and we want to bring the expertise we have across all product lines to the floor there,” he said.

Supply and demands

There are also challenges. As O’Neill pointed out, the economies in the region have taken a hit as a result of the pandemic.

“The macroeconomic results of COVID-19 have caused real problems for our clients in terms of the basic economics of how that they can grow their businesses,” he said.

On one hand, the threat of a pandemic is not new to the region. O’Neill has worked in Singapore previously and was in the country during the SARS outbreak in 2003. COVID-19 has changed the conversation, however.

“People have been talking about pandemics for years, but now it’s actually happened,” he said, adding that it’s likely to have a long-term impact on how businesses operate.

“I can’t see how the same sort of risks can be taken in terms of managing businesses when something like this could potentially happen again.”

One consequence is likely to be a shortening of supply chains globally, but particularly across Asia-Pacific in light of the 10-country Regional Comprehensive Economic Partnership agreed last year to create the world’s largest trading bloc.

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“When it’s implemented in 2022, you’ll have countries from China through to Australia in a trading platform that effectively controls 30 percent of global GDP. There’s going to be a lot of regionalisation, which will impact the businesses here,” he said.

The pandemic has reinforced another trend: the focus on sustainability.

“There’s even more understanding about the impact on the environment when it is business as usual,” O’Neill said. For many, that poses significant challenges, but COVID-19 also brought time to address it.

“Strangely enough, it provided an opportunity to reset. Previously there’s been no time to do anything, but now there’s been a lot of government discounts and investments to allow companies to invest significantly in clean energy,” he explained. While the US is committed to investing $44 billion into clean energy by 2030, China is investing double that over the same period, he pointed out.

That’s an opportunity for businesses, but also for Howden, according to O’Neill. “There’s a real opportunity in Asia to be part of that,” he said.

“The thing the insurance industry brings that should never be forgotten is best practices from around the globe,” he said.

“We can sit with clients in this region and discuss the issues surrounding their assets or whatever they want to protect and provide information about how other companies have done it and the best practices available.”

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