Broker profile: Never a dull moment

Sydney-based Craig Claughton, Marsh MD and Head of FINPRO Pacific, pictured, is kept busy travelling internationally with clients every few months to secure hundreds of millions in capacity.

You are London-bound in April. Tell us about the trip.

I travel to London four or five times a year. This trip is mostly around Directors’ and Officers [D&O) and Professional Indemnity. We used to be able to get $200 million out of Australia, but now you’d be lucky if you could get $50 million, so it is quite a significant restriction and you have no choice but to use international markets.

When I have clients looking to buy $300-400 million of cover for a particular program there simply is not the capacity, and we need to present client risks to other jurisdictions. The UK is our common one, and sometimes it includes Bermuda or Asian countries as well.

We take clients with us and then they present their risk to various insurers, sometimes in a group and sometimes one-on-one, and ultimately we negotiate a deal for those markets to come onto their programs.

It always sounds far more exciting and glamorous than it really is. Not everyone is cut out for it, and it does come with some sacrifice. You end up losing your weekends usually, and of course it impacts your family life as well, and no one does your day job while you are travelling. So you end up trying to keep on top of emails at night and there is jetlag and so on, but I do enjoy it and I never complain about it.

You get to spend time with a client over lunches and dinners while you are travelling, and you can build really solid rapport and connections. I really enjoy doing that.

You began as an underwriter. How did you come to manage a team of 100 at Marsh?

I am just coming up to 20 years in broking, all of that at Marsh, and prior to that I had 20 years in underwriting, so I am 50-50 now.

I come from Adelaide originally. A good friend’s father was a claims manager and they were looking to recruit what we then called cadets, so I took that on at the age of 16. Then I studied at ANZIIF [the Australian and New Zealand Institute of Insurance and Finance] part-time, and subsequently completed a Bachelor of Business.

Marsh called me in 2002 and I have had many great opportunities here. They brought me in as a senior broker to look after one of their very large banking accounts and then I gradually took more and more senior roles and then ultimately led the Australian business, and a few years after that was asked to lead to the Pacific region.

I certainly enjoy the broking side. There is enormous variety. In one day I might be dealing with a major bank or law firm, or I might be dealing with a multinational retailer or mining client. That is how my day can look and that is enormously interesting but also challenging, because you have to keep across all of those things.

How have you been active in litigation reform?

In Australia Marsh had a very dedicated campaign advocating on behalf of the clients trying to get legislative change. I was doing media articles every few days, bringing public awareness to D&O insurance and how that would potentially affect investments in companies they have shares in.

I have appeared before several Senate and parliamentary inquiries. Last year the Corporations Act was changed in the area of continuous disclosure laws, and litigation funders are now required to be licensed or regulated.

We have continued that campaign and there is more change to the Act likely, around the capping of litigation funding earnings and then some more broad guidelines around class actions in Australia.

It will take some time before underwriters start reducing the prices because of that, but it will have to help as it has made the playing field level.

Prior to these legislative changes it was an unfair system and companies would just settle claims because they felt they couldn’t defend them and wouldn’t get a fair hearing in the courts. That has changed now.