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Broker focus: Establishing a native global broker in Japan

Source: Asia Insurance Review | Nov 2014

UIB owes its very existence to the Japanese insurance market. If it were not for the historic relationship that UIB and the Kabban family have had with the Japanese insurance companies it is doubtful whether the UIB Group’s birth 28 years ago would have taken place at all. Mr Bassem Kabban of UIB Holdings gives us an insight into the group’s history in Japan as well as its endeavours to establish a native global broker there. 
 
UIB was made to feel very welcome by the main insurance companies in Japan. When UIB was formed, it shared a similar platform to what was then known as Greig Fester (now part of the Aon Benfield group), and as UIB grew, it managed to work with more than one Japanese insurance company. In relation to its size, UIB has a significant strong bond with the Japanese insurance market.
 
Passionate in all things Japanese 
UIB’s main strength has always been its passion to provide the best service, something which the Japanese expect from their business partners. We broke the myth that Japanese insurance companies only work with the largest brokers in the world and it has been proven that Japanese companies are more sophisticated than that. 
 
They choose to work with those who deliver on their promise of service and are experienced in the work that they do. In fostering its relationships in Japan, UIB also recognises the importance of not taking loyal business partners for granted.
 
Perhaps, due to my passionate interest in all things Japanese (I speak Japanese too), since UIB first entered the Japanese market, I have had the privilege of being the custodian of UIB’s relationship with its Japanese clients and colleagues. Our partnerships in the Japanese market have grown continuously, with mutual trust and confidence increasing year on year, and today, UIB is a highly respected facultative and treaty reinsurance broker in the Japanese market.
 
Truly client driven
Unlike other major brokers, UIB did not inherit any of the relationships it has today, working first to create, and then to nurture each in turn. Today’s Japan-oriented UIB team continue in this vein, working hard to capitalise on the solid foundation that all of UIB’s hard work over the years has generated, with everyone at UIB being proud of their achievements in Japan. 
 
We always remind ourselves and our clients that UIB is not better than others - just different. One of the key differentiators is that UIB is truly client driven and purely focused on clients’ needs. 
 
A distinctive strength is that the majority of UIB’s shareholders are working members of UIB and have all their interests firmly aligned with those of their clients. UIB is going through major changes and is working to achieve continued sustainable growth to further differentiate itself from other market participants.
 
“Walking along the stepping stones of the garden”
 With regard to other non-Japanese international work, UIB has achieved an impressive entry into the Latin American market in the last five years, but I believe we should further sharpen our focus on our Japanese core. To that end, there is an ongoing, in-depth, review of what we should be doing to ensure we achieve further growth in Japan.
 
UIB has a clear vision for the future and, as the Japanese might themselves put it, we are now “walking along the stepping stones of the garden”. This vision has been sharpened by a period of thoughtful and reflective contemplation.
 
It is interesting to note that while Japan is the second largest insurance market in the world after the USA, it does not have its own global reinsurance broker, with the major international insurance brokers there being American. So it is time that those who are close to the Japanese market and understand its dynamics, should lead the process to give Japan a world class home-grown reinsurance broker.
 
Birth of a native global broker
Sumitomo Corporation (SC), a major, but traditional Japanese trading house with the Yamato spirit, is ideally placed, with UIB as its partner, to realise this vision. Over a period of many years, we have developed a close friendship with the senior management at SC, and this can be a solid rock on which to build a partnership.
 
The recent UIB announcement of close co-operation with Bluewell Insurance Brokers – a wholly-owned in-house insurance broker of SC – is a first step in UIB’s strategy for its future in Japan, as well as being a milestone along the way to helping SC become the pre-eminent Japanese reinsurance broker.
 
UIB will make its global expertise available to Bluewell on the reinsurance side. Bluewell, in turn, will focus on generating opportunities, and UIB will deliver professional service, so that both achieve growth. Japanese companies will want to continue working with their existing brokers of choice, but they will also gradually support the birth of their native global broker.
 
Looking outside Japan
Japanese firms involved in the Japanese insurance market recognise the profitability of their domestic market, but they feel that they are restricted when it comes to growth. So the decision is to stretch beyond Japan, to other parts of Asia in the first instance, and to the rest of the world thereafter.
 
Japanese businesses are actively operating outside Japan, so Japanese insurers need to be by their side to support them. A broker that fully understands the dynamics of servicing Japanese clients will complete the circle, which is where UIB, with a wealth of experience over many years of servicing a large number of Japanese trading houses, and Bluewell as part of SC, come in.
 
It is a matter of record that SC has been very active in different parts of the world, with great emphasis on emerging markets. Africa, in particular, is a continent that SC recognises as of preeminent importance to the Japanese economy.
 
How the Sumitomo model differs
On how the Sumitomo model differs from that of other Japanese trading companies, well, there are many similarities, but there are two main important differences. 
 
The first is that, to date, other Japanese trading houses bought into brokers that were available for sale with little, if any, knowledge of the Japanese insurance market, so Japanese insurance companies did not accommodate them. As a result they were unable to secure enough business to sustain their model.
 
The second is that other trading companies bought 100% of foreign insurance brokers to facilitate their expansion plans, but this did not deliver the desired results, as the management of the acquired brokers, having become rich overnight through the acquisition process, then left the venture. 
 
In an industry that is so heavily dependent on its human capital for success, the inevitable consequence was that pre-acquisition business plans came to nought.
 
Mr Bassem Kabban is Chairman and CEO of UIB Holdings (UK) Limited.

 

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