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Flying the flag for good risk management

In September 1986, the Northern Ireland peace process had just begun when a young Merv Rea entered the Zurich office in Belfast, Northern Ireland. On his first day, Merv was handed his stationery and shown where to store the all-important ledgers and paper files. His job was in the mail room, the introductory setting for so many great corporate success stories.

Merv’s original intention had been to study sound engineering. But the offer of a paid job while studying for chartered insurance qualifications was too good to refuse. Thirty years later (his Zurich anniversary is in early September), Merv is thrilled with the decision he made.

“The insurance industry is often taken for granted,” says Merv, who is Head of Risk Engineering, Australia and New Zealand at Zurich Financial Services Australia. “But what insurance provides is certainty and a promise in the hour of need that if something goes wrong, we are there to provide financial assistance. We keep businesses ticking over by freeing up capital. I think our role is vital.”

After being promoted out of the mail room, Merv began in personal motor underwriting, then heavy motor fleet underwriting. In 1991 he moved to Zurich’s Manchester office in the UK.“During my tertiary training program, I spent time with different underwriting disciplines including employer liability, public liability, property and risk engineering,” he says. “There was a vacancy for a trainee risk engineer, a role I applied for successfully in 1993.


Since then Merv – who is married, with a stepson and a daughter – has remained in the risk engineering field. He defines risk engineering as “getting under the skin of the customer to understand their risks and evaluate their ability to manage and control them”. 

This analytical skill is one Merv also puts to good use in one of his hobbies, vexillology – collecting flags and studying their symbolism. “My neighbours have become avid fans and there is a little bit of competition as they try to figure out which flag I’m flying each day,” he says.

As he keeps his finger on the pulse of client industries – which included mining when he first came to Australia in 2003, for a nine-year stint in Perth – Merv has also observed his own industry change dramatically.“

I have witnessed the transition from the old-fashioned model to a modern-day global, internet-based industry,” he says. “The risk horizon never stands still. There are always new emerging risks and new complexities of risk.”

Trends in risk, Merv says, are being driven by the fact that we’re currently going through a new form of industrial revolution. “In the late 1700s and early 1800s, when machinery was introduced to factory floors, mass production was a game changer. We are going through a similar change now, with this revolution being driven by technology.”

The way businesses operate is changing, Merv says. The result is the complete opposite of the mass centralisation of labour that characterised the industrial revolution.“

Do we need large factories or offices any longer?” Merv, who is now based in Melbourne, asks. “With mass production we needed employees in the same space. Now you can have people who are well equipped to work at home or remotely, sometimes without any fixed assets.“

In fact, an entire business can operate in this fashion. Look at Uber, an incredibly successful business model. It has 1,400 taxi bookings around the world every minute, but it does not own a taxi and it does not pay any driver wages.”


What does all of this technological change mean for insurance? Plenty, Merv says. Think of driverless cars and the need to focus on safety and crash-avoidance systems. A decline in crash activity is likely, but so is a new form of risk associated with cyber. “For every solution there is a new risk,” he says.

Similarly, for the insurance industry Merv highlights a potential opportunity to extend beyond traditional actuarial principles of risk analysis that tend to look at past events and, instead, use big data to become more future facing.

There is also potential for change around how insurance is transacted, Merv believes. “Why do we have 12-month contracts? Can they be shorter or longer? Can people simply pay when they need cover and not when they don’t?” he says. 

“Also, will there be a time when people and organisations broadly use crowdfunding as a means of insurance? Will people do that through social media? This is not too far removed from the concept of insurance: the premiums of many paying for the claims of the few.”

It is these thoughts and more that will drive Merv into his fourth decade with Zurich, after a career that has taken him around the globe (which has certainly helped scratch his vexillology itch!) and taught him the virtue of patience. 

“If there is one lesson I’d pass on to the younger generation it is to be patient and use your early years to muster as much experience and knowledge as you can,” he says. “Develop your contacts and your network. Then wait patiently and the right opportunities will come.”

What insurance provides is certainty and a promise in the hour of need that if something goes wrong, we are there to provide financial assistance.