Group chief executive Gordon Marr explains what makes Hansard Global unusual, how its new strategy is developing and the life firm’s plans for the future.
Why do you describe Hansard as unusual?
We are unusual for two reasons. As far as I am aware we are still the only fully listed company on the Isle of Man, but we also come from a family business background.
While we are a listed institution, with all the corporate governance that goes along with that, we still retain the good things about being a family business, such as our long-serving, passionate staff.
Where do you operate and what products does Hansard offer?
The Isle of Man is the central hub, where the vast majority of our employees are based and where our IT development is undertaken for the whole group. The rest are spread between Dublin, Hong Kong, Dubai – with its strategic alliance UAE-based Union Insurance Co announced in February – Kuala Lumpur and Tokyo.
We are a regular savings, regular premium company. We used to do little in terms of single-premium sales but that is becoming a big proportion of our business.
Sipps and Qrops, which HM Revenue & Customs now calls Rops, were traditionally a very small part of our business but it is growing. It is only in the past two years, with the strategic changes we have been making, that that business has started picking up. About a third of our new business is single-premium-type sales, of which around half is Sipps and Rops.
We offer a different product in Malaysia, which goes through our Labuan branch, and when we had Hansard Europe we had many different products. What we offer now is very similar from one place to another. During the past two years every single product we have has been revamped.
We like to work with financial advisers and listen to what they feel could improve our products or what changes we could make to meet a need.
We are about to launch a new bond structure where commission can be sacrificed to leave only a small quarterly service charge in place. Brokers are starting to work out how they will run their business in the new regime, particularly in terms of transparency.
Do you mean the new mandatory commission disclosure requirement from the Isle of Man regulator?
Yes, it is still only at the consultation paper stage [a final draft of the consultation paper is expected by April 2017] and there seems to be a focus on single-premium sales. The regulators want product providers to be more interested in and responsible for positive outcomes for policyholders. We think that is a good thing.
It is actually very rare for us to receive a complaint about commission. There is a lot of upfront disclosure. We would expect our clients to have a good understanding of what they are buying.
I worked in the UK in the 1990s when commission disclosure first came in. I do not think the market was overly affected by that change. Our view is that transparency is coming but we are geared up to handle it.
Who is the Hansard Global client?
Our core market would include some high net-worth individuals, but really it is the mass-affluent and expat market. They have a fairly high disposable income and are building their wealth, so they have not yet moved into the high net-worth band but that is what they aspire to.
It is not just the typical British expat working in the Middle East anymore, our clients are a lot more diverse. They all have the same basic needs, they want to save in a currency that suits them, they are probably working somewhere that is not going to be their long-term home and there may be reasons they do not want to save their assets in that region.
People keep talking about all the challenges this industry faces but what we forget is that we sell to a need, to a group that is actually growing in terms of size and wealth, who live longer and want to save for their long-term security in a place where they feel their investments are secure.
How important is technology to Hansard?
We do not outsource development. A quarter of our workforce is IT-related, so we are in control of our own technological destiny and are not bogged down by legacy issues that can be common in big companies.
Online is critical to our future. People are going to get so used to doing things online. You have got to have that facility in good shape. We feel fortunate that we do but it is something we have been working on for 15 years.
We can issue a case within hours of it arriving online. Our system will not let users proceed unless all of their information is input, it is straight-through, end-to-end processing that is adding huge efficiency within the business.
The digital age is with us and we feel well placed to take advantage of the latest developments. It is still an unproven case that products, particularly international ones, will sell themselves.
So your distribution remains traditional?
That has not changed and we are very clear, we distribute through independent intermediaries. That is the traditional route for our industry.
Part of our strategy is that we want more, and more diverse, relationships with advisers. We have added a lot of new relationships to our book and reawakened a lot of old ones, where people had not done business with us for five-plus years.
In the past year, around 85% of our new business came from those new and re-established relationships. Our aspiration is to be the preferred choice for distributors when they are looking for an international savings and investment product for their clients.
How about your new strategy?
Our strategy, which is about 18 months old, is to build the scale of the business in a diversified way, through organic growth and with acceptable levels of risk and profitability.
We have focused on six areas: our relationships with distributors; customer service excellence; motivating and engaging our workforce; growing our market presence; raising our industry profile; and making sure our online systems remain market leading.
The Middle East and Africa was the first region that we reorganised and put the new sales structure in place, and it was our single biggest growth area last year in terms of the present value of new business premiums. We expect similar improvement in the Far East, Latin America and our Rest of World regions this year.
Will you reopen Hansard Europe?
Never say never, but at this point our experience with Europe is that it is too complex and diverse for a company of our size to deal with.
You have got different laws, languages, and tax rules, to name but a few of the challenges. You end up with a hugely complicated, divergent product range that is too difficult to manage.
In the end, that is why we decided Europe was not really the best use of our resources when we could be doing a much better, more valuable job for the group in the international marketplace.
But even though we are running a closed book we still have to keep an eye on any European Union regulatory changes to see whether they affect our business.
What changes have affected Hansard?
One of the biggest challenges is the sheer amount of time and effort required to deal with all the regulatory changes. In the past couple of years, we have had the Common Reporting Standard, the Foreign Account Tax Compliance Act and, even though our Irish business is closed to new business, we still had to implement Solvency II.
What does the future hold for Hansard?
More change. We are looking at new markets and new ways of doing things and have a number of irons in the fire in terms of licences and joint ventures.
We have an overarching view of our priorities and know that we have to stay agile so that we are able to change priorities at short notice if needs be.
By Kirsten Hastings, senior reporter, International Adviser