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The things that make a good insurance CEO

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What makes a successful insurance company chief executive? According to the media pundits and market analysts, extensive insurance experience is at the top of the list.

That’s precisely what Suncorp CEO Michael Cameron didn’t have when he was appointed to the role in November 2015. And in the absence of any solid statement defining why Chairman Christine McLoughlin accepted his resignation just over a month out from the end of the financial year, many have accepted that Mr Cameron’s lack of general insurance experience must have told against him.

Mr Cameron was plucked from the company’s board in 2015 following the resignation of Patrick Snowball. He had served as a director for three years, and was generally regarded as a career banker, having served as CFO of both the Commonwealth Bank and Westpac’s St George Bank.

Yet that perceived lack of insurance experience didn’t deter then-chairman Ziggy Switkowski from appointing Mr Cameron. The appointment bypassed the group’s widely admired head of insurance, Mark Milliner, who had worked at Suncorp for 20 years and knew the business inside-out.

Mr Milliner headed across George Street to join arch-rival IAG’s new MD Peter Harmer. His performance as CEO of the group’s dominant Australian Division has served as a benchmark for analysts measuring Suncorp’s performance under Mr Cameron.

As The Australian newspaper’s John Durie put it bluntly when writing of Mr Cameron’s departure: “Over the last four years IAG has outperformed Suncorp by 37%, with [Suncorp] underperforming the market by 13%. This tells you all you need to know about why Michael Cameron is no longer the CEO.”

It has certainly been a rough ride. Some sources have suggested Mr Cameron fell foul of some board members by following up the sale of the group’s life insurance operations for $725 million last November with a plan to grow Suncorp’s bank by merging it with some of the surviving regional banks.

Investors and key board members are understood to have seen more upside in Suncorp selling the bank for around $4 billion and becoming purely a general insurer – like IAG.

Was the debate over the bank’s future poisonous enough to see Mr Cameron heading for the exit – reluctantly or willingly, it doesn’t really matter – without an obvious successor in mind or a recovery strategy sorted out?

And was his departure hastened by the lacklustre performance of his key Marketplace strategy, which he believed would spread the group’s products across Suncorp’s customer base?

The strategy has received limited internal support, with industry sources telling it took little account of the long-held understanding that people don’t buy financial products in the same way they buy their groceries – they differentiate between banking, life insurance and general insurance.

Mr Cameron predecessor, Patrick Snowball, was a highly experienced British insurance manager who took up the top job at Suncorp after missing out on becoming CEO of Aviva.

He is credited with forcing unity and efficiency on all Suncorp’s disparate insurance operations acquired over the previous 10 years.

So now Suncorp is looking for a new CEO with the ability to re-ignite its operations and enthuse shareholders. And, of course, insurance experience is a must.

So how do you gain insurance experience, if you haven’t progressed through the ranks from mailroom clerk to senior executive, as so many of the previous generation of CEOs did? has seen many senior insurance executives come and go. Some even moved on of their own accord. From our observations, we have concluded that insurance experience isn’t essential, but…

Good accountants make good insurance executives, probably because they can understand the way in which insurers play the risk game with billions of dollars. Former IAG MD Mike Wilkins, who formed Promina and then sold it to Suncorp in 2006 for $7.9 billion, is a good example.

Bankers sometimes struggle to comprehend how insurance professionals balance risk and reward and sometimes are forced to lose billions to claims with a regretful shrug. Of the bankers we can recall who made it to the highest levels of insurance, one or two understood it.

So that brings us to the shortlist for Suncorp’s new CEO. We have chosen The Australian’s list, as it at least shows at least some knowledge of who might be who in the local industry.

The newspaper canvassed the opinions of several analysts who follow the listed general insurance companies and found they are united in their belief that the new chief at Suncorp will be in a hurry to sell Suncorp Bank.

As Bell Potter Securities Head of Research TS Lim puts it: “Cross-selling [of banking and insurance products] is a thing of the past.” So much for the Marketplace strategy.

The Australian names Suncorp Insurance CEO Gary Dransfield and CFO Steve Johnston –who has been appointed acting CEO – as being “in the frame internally”.

Their “external” candidates list includes Mr Milliner, who is already doing at IAG what he would undoubtedly have done at Suncorp. The other top executives named by the newspaper would be unlikely to move because they’re immersed in their own improvement programs or are on a strong career trajectory where they’re working now, thanks.

Besides that, any senior Australian executive making a move to Suncorp would have to weather a long period of gardening leave, and Suncorp’s board is probably unwilling to wait too long.

Our bet is that if Suncorp doesn’t go with one of its an internal possibilities, it will look overseas for another Patrick Snowball – an executive with heaps of insurance experience and an ability to win the confidence of shareholders.