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June 28, 2016

Best Insurance? A Leadership Pipeline

Summary:

Whatever lines of insurance you sell, there’s just one policy for company longevity: a strong leadership pipeline.

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Insurance leaders, you spend every day helping customers plan for the future, and you know that disaster can strike anyone, anytime.

But have you done all you can to prepare your company for what the future holds? Whatever lines of insurance you sell, there’s just one policy for company longevity: a strong leadership pipeline.

Unfortunately, many insurance companies forgo this essential coverage. Last year, Deloitte found that just one in three insurance companies believes its future leaders are prepared to respond to tomorrow’s business challenges — despite 87% citing leadership development as a priority.

What’s so important about leadership development? For one, leadership quality cuts straight to the bottom line. Equity analysts place, on average, a 16% premium on company stock prices when they see effective leadership. But when they perceive a company’s leadership is ineffective, analysts discount the company’s stock price by about 20%.

Strong leaders build value because they know people are an insurer’s greatest asset. They recognize that empowering team members pays off in loyalty, reduced turnover and enhanced customer service.

I’ve seen my company through nearly a quarter of its centennial life, and through the course of my career I’ve learned a thing or two about insurance leadership.

Like many of us — be honest — I didn’t grow up dreaming of a lifetime in insurance. California Casualty was my first job out of college, though, and it’s been the incredible career I never expected. The company’s mix of challenge, inspiration and flexibility has helped me grow from sales consultant to team manager to vice president.

But I’d have never reached the position I’m in — not to mention stayed for two decades — had I, too, not learned from strong leaders. Now it’s my turn to find the company’s up-and-coming leaders, and I look for five traits in tomorrow’s standard-bearers.

See also: The Insurance Renaissance, Part 4

First and foremost, effective leaders have integrity. Integrity is difficult for some, but it’s actually a simple concept: People with integrity do the right thing even — and especially — when no one is watching. In our industry, policyholders depend on us to fulfill our obligations, often when they’re most vulnerable.

That’s why California Casualty created a written code in 1965 to act as the company’s moral compass. It champions integrity and the singular importance of doing the right thing for our customers. The code reminds me — and future leaders — that it’s better to fall short of our goals than to meet them through dishonesty.

Strong leaders must also be able to influence others, and I’ve seen firsthand the importance of inspiring, motivational leadership. Before any sweeping change, my company informs key influencers and involves them prior to the full-staff rollout. This creates buy-in and helps them serve as role models to team members who might not feel as comfortable with changes, and provides hands-on leadership experience before they truly take charge.

Confidence, tempered by humility, is another quality I’ve found is essential for insurance leaders. These leaders surround themselves with team members whom they can learn from — and whom they can teach — when exploring issues and making tough decisions.

Confidence also means being transparent with your team. I don’t always make the right decision, but I’m confident that, if I make a wrong move, my team and I will work together to adjust, learn and improve.

Alongside confidence, I look for flexibility balanced with accountability, which helps to unlock a team’s potential. When I first became a team manager, I learned that my sales strategy didn’t necessarily work for others. I had to step back and recognize that there’s more than one way to exceed targets.

There’s one final trait all successful insurance leaders share: strong communication skills. To build a successful team, you must clearly articulate goals and the drivers behind them. At our sales rallies, we talk about targets, of course, but we also seek to understand the “why” behind our numbers.

We recently implemented underwriting changes, for example, that made it more difficult for sales consultants to sell policies. Taking time to discuss policies’ loss ratios and profitability issues has helped our sales team adapt to these changes and improve the company’s future.

See also: Can Insurance Innovate?  

With all the important qualities an insurance leader must possess, it’s tough to find tomorrow’s perfect leadership team. But once you’ve identified promising candidates, you’ll need to help them rise to the challenge.

First, start with face time. Get to know tomorrow’s leaders on a personal and professional level. To help them define what they want to achieve — both in their current role and in the next — work with them to create short-term and long-term goals. Boredom lurks behind turnover, so setting “stretch” goals is a great way to keep up-and-coming leaders engaged.

Second, find opportunities to let them shine. Never underestimate delegation as a leadership-building tool. When employees are given ownership, it builds their confidence, showcases their talents to others and prepares them for their next positions. I give young leaders opportunities to assist with recruiting and hiring, mentoring new associates, and leading annual meetings.

Next, give them a say in company decisions. Employees at all levels have fresh ideas that can benefit the company. By giving them a say, you nurture growth, learn their thought processes and cultivate buy-in at the same time.

Finally, build bench strength. Don’t wait for a position to open. Employ an approach of continuous development to ensure you can tap the right talent when you need it. Plan ahead as you hire: Employees who understand technology and analytics will be increasingly important for insurance leadership.

In the end, insurance leadership isn’t about titles, nor is it about sales figures. In our industry, it’s our job to be there in policyholders’ times of need; we have the chance to truly improve lives. So while I may not have always dreamed of an insurance career, it has been an incredibly fulfilling one. Now it’s my job to find new leaders who feel that way, too.

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About the Author

Lisa Pearne is vice president of sales at California Casualty, an auto and home insurance provider founded in 1914 that serves educators, law enforcement officers, nurses, and firefighters.

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