Either do what you love or learn to love what you do, says Ellipse chief executive John Ritchie, who chose the latter. “I had no master plan but now it is a life insurance pride thing. I think what we do is good, even though we have legions of people such as the regulator and the Government telling us otherwise.”
A graduate role at Provincial Mutual set Ritchie on the path to insurance despite plans to practise criminal law in Northern Ireland. He says: “There was no shortage of business there in the early 1980s but during my degree, I got more interested in the business side of things.”
From Provincial, Ritchie went on to Munich Re, a company he was to return to both as head of group risk in 2004 and again in 2008 as CEO of Ellipse, a Munich Re group project.
“I have seen the insurance trade from different positions in the value chain. I was at Munich Re for many years as a reinsurer and at Swiss Life as an insurer. My time at St James’s Place gave me an insight into how advisers work with protection, so I had a fair few views about how things could be done differently.”
Ritchie’s appointment at Ellipse came after a six-month break spent playing golf.
“My wife said I was enjoying myself too much, so Munich came and poached me for some group-related stuff they wanted doing. I found it quite exciting because they were launching a new product at the height of the crisis, when everyone else was shelving plans.”
The prospect of diversifying the group risk market appealed to Ritchie. “Our big idea was to take all the existing processes and make them better, cheaper and quicker.”
His time at Swiss Life furnished Ritchie with an idea of how he wanted Ellipse’s systems to work. “The way we did business there was quite chaotic at times. We said, ’We will look at anything,’ which brings a huge hangover of administration. A lot of the operations used in group risk generally were outdated compared with pensions, PMI and individual protection.”
Ritchie says this lesson explains why he was determined to ensure automation lies at the heart of Ellipse’s business model.
“Our platform pumps data into our system, then we pump premiums and accounts and underwriting requests back on to that platform. All this happens within one payroll month compared with the traditional method, where the platform provider runs off spreadsheets and emails them, which can take three months. You can go on to our website and get a binding quote for up to 500 lives on group life and 300 lives on CI. Our competitors only go up to 100.”
Ritchie is aware that some situations call for face-to-face interaction. “When it is claim time, it is people time because these situations are sensitive.”
He believes that the instant gratification that automation offers should be combined with knowledgeable advice, which is why adviser relationships are the most important part of Ellipse’s model. “It is all about adviser productivity. The traditional model is going to come under a lot of pressure with the RDR. Once an employer has figured out what benefits they are going to give their staff and how that fits in with tax, they will want the process to run smoothly and they do not want to pay high fees for that.”
Ritchie believes savvy advisers will become consultants rather than transactional brokers and outsource processes administration to suppliers.
Ellipse services 200 IFA firms but Ritchie believes this will increase once auto-enrolment and Nest take hold.
“We think they will be huge stimuli for group risk. Employers will probably need a bit of help with Nest but how does an IFA get paid for doing that? Probably by offering surrounding ancillary benefits. Employers will say to themselves: ’We have to do this pension thing because the law says so, so we might as well make a virtue of a necessity and put a broader benefit programme round that, like life and disability cover,’ and that is where we come in.”
Ritchie thinks that group risk will become more closely aligned with pensions and other benefits through technology. “They have been separate for about 30 years but it is a platform world now and I think pension platforms will include flexible benefits sections soon. They are only separate at the moment because the pension adviser, the risk adviser and the technology provider are separate but Ellipse will benefit if they come together because our aim is to become the best supplier of group risk to platforms.”
Ritchie believes Ellipse is well placed to achieve this goal as it was built with platforms in mind. It has also just built an automated system that can receive data from employee platforms with Thomsons, due to market in October.
“The concept of the company and data-linked platform is 10 years old. While I was at Swiss Life, we tried to be the leading insurer of flexible platforms but only the biggest law firms and banks used them. Now it is a different story, so we want to attach ourselves to the growth curve.”
The company is also looking to expand its product range. “We are going to target small companies with an IP offering in November. It is a pretty radical offer – it says the idea of looking at long-term sick people who have been off for four to eight weeks is stupid, you need to know about them earlier, so we are going to blend an absence management product and a disability income product. We are pricing it at the moment.”
But Ritchie does see one obstacle to achieving these aims. “The industry is not doing enough to raise awareness of protection. There is all this talk about working groups but what is the point of industry insiders talking to each other? People should be going back to their company boards and getting marketing funding. In Australia, they have great marketing and they pay attention to making insurance easy to get, which is not the case here. We need to be more efficient and less obscure.”
Born: Downpatrick, County Down, 1960
Lives: Dartford, Kent with wife and two sons
Education: FCII, chartered insurer, and a degree in law at Manchester University
Career: 2008-present: chief executive, Ellipse; 2004-08: head of group risk and client marketing, Munich Re UK Life; 2003-04: protection director, St James’s Place; 1999-2003: employee benefits sales and marketing, Swiss Life UK; 1983-98: marketing and group risk, Munich Re UK Life; 1981-83: graduate trainee, Provident Mutual
Likes: Make-it-happen attitudes, my wife’s Sunday lunches and golf courses in County Down
Dislikes: Cynical life companies, meetings without actions and slow play in golf
Drives: An Audi A5
Book: The Border Trilogy by Cormac McCarthy
Film: White Men Can’t Jump
Album: Rum, Sodomy and The Lash by The Pogues
Career ambition: Ellipse being established and being the benchmark for excellence in UK group risk
Life ambition: Do no harm and enable and encourage potential in my family
If I wasn’t doing this, I would be…In some sort of adviser job or strategy consulting