Establishing trust in a market that never sleeps
Swiss broker's international business requires precise communication
By Thomas A. McCoy
GWP Insurance Brokers, a 60-employee firm based in Zurich, Switzerland, is the result of a merger of five brokers in different parts of the country. With offices in four cities, it serves both the French- and German-speaking regions of the country, writing only commercial business. GWP was started 20 years ago by its current CEO, and for the past nine years it has been owned by Daimler Corporation (formerly Daimler-Chrysler) and is an Assurex Global affiliate.
Swiss brokers, like their American counterparts, are battling the soft market in property/casualty. GWP has been winning the battle—growing by 13% to 15% annually for the past five years. “We expect to continue to grow at that rate,” says Armin Gutmann, manager of GWP’s International Department. “Some of that growth will be organic, and some by acquisitions.”
GWP’s International Department currently produces approximately 15% to 20% of the firm’s revenue. Although Switzerland has common borders with five countries, much of this international business comes from much farther away.
“Swiss corporations become involved in international business at a very early stage,” Gutmann says. “Surprisingly, though, they often set up their first subsidiary abroad not in Germany, Italy or France, but in Asia or the USA. They normally know the languages of their neighboring countries. They want to go into new markets.”
In Switzerland, says Gutmann, “It isn’t only the giant firms that are expanding to other parts of the world. Just in the last few years we’ve seen companies with only 20 million or 30 million Swiss Francs turnover (around $17 million to $25 million in sales), and they build a new factory in China.”
He says Swiss companies that are expanding abroad include textile companies and manufacturers of machines and fastening systems. “Labor costs in Switzerland are quite high, so we see growth in companies that utilize a lot of technology in their manufacturing. For example, we insure a company that uses technology to measure yarn. It is the world leader in that field.”
Gutmann is a native of Germany who came to GWP five years ago after working for two different German independent brokers that already had operations in Switzerland. Each of those German firms ultimately lost its independence when it was acquired by an American broker—one by Marsh, the other by Aon. Gutmann now competes with those same firms in Switzerland; in fact, GWP trails only Marsh, and Aon in size in Switzerland.
Gutmann describes his role at GWP as “a provider of expertise. The sales people open the doors; I help set up and manage the insurance program.” That means working in multiple languages and across wide-ranging time zones. The pace—aided by advances in technology and the growth of international trade—is fast. “Ten years ago,” Gutmann says, “I was expected to establish an international program within a year. Nowadays you are asked to do this in two months.”
Working in the international market requires “good communication style and structure,” says Gutmann. “That includes communication with the client, with the insurer and with my (broker) colleagues abroad.” It also requires a complex blend of personality traits, Gutmann believes. “You must be open to other cultures, extroverted and very well organized.”
To understand the multicultural challenges of the international market, consider the differences in the way Americans communicate by e-mail. Some send highly detailed messages; others are much more cryptic. Some e-mailers are light-hearted; others sound more serious than they would be if communicating face-to-face. It takes a while to figure out someone’s e-mail style. Just imagine trying to understand all the nuances of an e-mail message in different languages.
It isn’t simply a matter of translating the languages. “There are differences in communication style from country to country,” Gutmann says.
“If you are the coordinating broker, you must control the whole communication process,” he stresses. “It’s essential to inform all parties at the same time, in the same way, with identical information. Otherwise, you can get back hundreds of e-mails.”
He says when placing a new program, “You give the initial information to your partners abroad. You have to cover, even with this initial information, all the essential facts. Otherwise, everyone comes back to me and asks, ‘What is the deductible? How much is my income? When does the policy start?’”
Sometimes a face-to-face visit is required. “There are some things Americans do not like to hear,” says Gutmann. “If you come from Europe and you want to integrate a U.S. subsid-iary into an international program which is placed in Switzerland, the local (U.S.) managers may be skeptical. You have to convince them that the global solution is better than their local policy. It’s fine that they are skeptical, but it’s easier to convince them if you visit them personally together with the local broker.”
The liability side of these accounts is the most complex, Gutmann says, and this requires educating not only the financial manager of the U.S. company, but the U.S. broker as well about how premiums are calculated. Liability rates in Switzerland, which are based on a corporation’s sales, are much lower in Switzerland. Those rates must be adjusted to reflect higher U.S. rates.
Gutmann expects benefits business to be a growth area in the future for GWP. “About a year ago we began hearing from companies who want to integrate their employee benefits program worldwide,” he says. Despite the product differences between property/casualty and benefits, he notes that there is a similar process involved in synchronizing coverage between the home office and foreign subsidiaries.
“With reporting tools that are available to us through the Assurex network, we can do this for our clients.”