WTW’s Chang: New industry vertical strategy resulting in record number of RFP wins

WTW’s Michael Chang has said the North America region’s new industry vertical strategy is resulting in a “record” number of RFP wins and that clients “love” the approach because the firm’s brokers are “speaking their language”.

Chang, who serves as head of corporate risk and broking (CRB) in North America, made those comments while speaking with The Insurer TV on the sidelines of this week’s RISKWORLD event in San Diego hosted by RIMS.

He spoke of how the region’s industry vertical strategy is resonating with clients, the success of WTW’s new MGU platform Verita, and gave an update on the broker’s talent strategy.

Since arriving at WTW in October 2022, Chang and his colleagues have made a move to establish 12 independently staffed divisions focused on verticals such as construction, financial institutions, professional services, and real estate, hospitality and leisure, each with their own P&Ls.

“The clients love it, because we're speaking their language,” Chang said.

“It's all about them. When you have an operation that eats, breathes and lives their space every day, it brings the best out of our people, but it also brings the best out of our clients,” he continued.

“The clients, as I'm talking to them today and yesterday, they love it, because we are really bringing cutting-edge solutions to them. We know their risk.

“We're bringing them ideas that, even though they were doing great things before, they can supplement in their risk management programs that they've put in place,” he added.

The goal of the new framework, Chang said, is to be “really innovative” in bringing clients new products and services.

“What we've done is really align it by client, understanding their business thoroughly [and] making sure that we can bring best-in-class solutions and services to those clients,” Chang argued.

Divisions rather than practices

WTW CRB’s North America head was emphatic that the new verticals are “divisions” rather than “practices” and each are uniquely staffed with broking, claims, analytics, risk control, sales operations and client advocacy executives that all sit under a different industry vertical leader.

“Ultimately, what we want is to have a structure where when we meet with our clients, we can deliver right then and there,” Chang explained, saying that delivering new products and services to clients is now a part of the region’s “DNA”.

“We have client advisory board meetings [where] we meet with 15 to 20 clients by industry and we talk about issues related to that: things we're doing well, things we're not doing as well, and how do we improve and then really putting a plan together to improve on that,” he noted.

“But then also looking at where those customers and their businesses [are] going and reacting very quickly to that, with new things and innovation,” he continued.

“And the last piece, I would say, it's really then understanding the marketplace and who do we go to engage with to bring the best price solutions and the best coverage to those clients as well.”

Chang said the new industry vertical structure has led to WTW’s CRB North America region “winning a lot more business” with RFP activity at “record levels”.

“It's even surpassing last year. So, I feel really good about it,” he explained.

Chang said that WTW’s strategy, in contrast with competitors that have set up industry practice groups, means that industry vertical staff at his firm have more direct control over resources.

“Whereas this is really a full-fledged, industry vertical division structure, where everything reports into that head and they're driving that business with that client,” he said.

WTW CRB North America talent “revolution” is “never going to stop”

Chang said the “revolution” regarding where his firm sources talent will continue and that the region is “never going to stop bringing in talent” that is “revenue generating”.

“We'll never stop investing in our businesses that we've put together and also our 12 industry vertical divisions,” he said.

Chang also touted the launch of WTW’s MGU Verita as “a huge part of our strategy” that is benefiting from “dislocation” of underwriting capital in the market.

“We are now filling a void by having Verita in place, and we've set it up, originally, by four of the industries – real estate and hospitality, financial institutions, professional services and leisure,” he said, with construction marked as the latest segment where Verita will launch.

“We'll get into other verticals, where it makes sense, where we can get the underwriting talent, to really go out … we want to be the best. So, we have to get the best talent to really deliver for that client base that they work with each and every day,” he commented.

Chang said that Verita’s “story” is “just beginning” and that the MGU is writing more business with third-party retailers than just providing capacity to WTW’s clients.

“The results thus far have been tremendous and we're going to continue to invest in a big way to accelerate that platform,” he said of the MGU, adding that Verita has benefited from relationships Chang and his team had cultivated when they were on the underwriting side.

The success of Verita so far, Chang also said, illustrates that WTW’s CRB unit in North America has “multiple levers” it can pull to be successful.

“We are truly a diversified business in North America corporate risk and broking. We're not just doing broking,” he said, pointing to Verita’s adoption in the market.

“We will make acquisitions where it makes sense. We have our affinity commercial programs in A&H. We have a high-net-worth personal lines business. We have our panels, facilities and other things [like] our facultative reinsurance business that are growing,” he explained.

“So again, you’ve got to think about this as really a diversified business within North American corporate risk and broking,” Chang commented.

Reclaiming business that moved into wholesale

Verita, he said, can “plug gaps for where we feel the market has left a lot of clients” as he pointed to a recently launched pandemic product to make the case that Verita is also offering “non-traditional” products.

“We're focused, we're offensive minded, and we're here to deliver each and every day for our clients. But we're going to do that through different parts of our business. Before we were doing one thing and one thing only,” he said of CRB North America’s new mindset.

“And we did it okay, but we didn't do it great. Now, we want to do multiple things, but do them all great. We want to be that best specialist broker in North America, which comprises different pieces,” he explained, pointing to traditional broking services along with what he calls “alternatives”.

On the major industry trend of more business moving into the wholesale channel, Chang said his region would look to recapture some business that WTW allowed to move into the wholesale segment when it was understaffed amid the uncertainty of its scrapped merger with Aon.

“We are totally committed to the wholesale space, we have not changed our approach and how we engage with our wholesale partners,” Chang said.

“We did use [wholesalers] when we were going through the failed merger in a massive way, because we didn't have the staff to be able to handle that business,” he acknowledged, adding that wholesale trading partners have recognised that some of that business is best served with retail distribution.

“What we use wholesalers for is tough to place stuff with things that we don't technically have all the resources to be able to deliver on and that's not going to change, right?

“So, I don't see it as one or the other. I see it as a dual, collaborative process,” he argued.

Watch the full interview with WTW’s head of CRB in North America Michael Chang to hear more on: