Tag Archives: people

InsureTech Connect: All About the People

Participating in ITC2021 was a blast! It was great to see so many people in person for the first time in a couple of years. But aside from the joy everyone was experiencing in just being together, there was a serious undercurrent to the event. In fact, as I polled individuals on their impressions of the event, many discussed how the participants came with a mission… a purpose… intention… and were serious about fulfilling their individual missions by capitalizing on the convergence of so many innovative companies and thought leaders.

If nothing else, ITC2021 demonstrated that innovation is alive and well in insurance, and the transformation of the industry is accelerating.

In his keynote, Evan Greenberg from Chubb stressed that all the technology advances do not change the fundamental nature of the insurance business – it is still about “the art and science of taking risk.” I couldn’t agree more. In fact, I have made similar statements myself.

Looking at the P&C industry, one of the overarching trends is the move to more and more specialization. This translates into a deeper understanding of the risks faced by individual and business customers – not just in the large pool but at a micro-segmentation level, as well. The insights and experiences about those risks translate into new products and coverages; enhanced loss control engineering and safety advice; and specialist firms to distribute, underwrite and service the products. This is not to say that the multi-line, general purpose companies will falter. On the contrary, they are participating in this general trend in each of the segments they serve.

Wait – I was supposed to be talking about the cool technology solutions and the innovations that are changing the industry, right? How did I get off track? As I see it, the amazing advances in technology, the innovative applications of technology by insurtechs and others, and the emergence of startups are actually quite consistent with and supportive of the increasing focus on risk expertise (and the value of insurance professionals). We are not going to automate away the roles of agents, underwriters, adjusters and others.

See also: Tomorrow’s Insurance Is Connected

There is no question that I was very excited to learn about the evolution and success of many insurtechs, discover new entrants with interesting propositions and track the innovations that incumbent players are incorporating into their solutions. They are catalysts for industry transformation. And they do offer great potential to automate tasks and workflows, provide new insights to improve decision making and provide opportunities for insurers to create new value propositions for customers.

But in the end, this industry is all about the people. Technologies will augment human expertise to improve efficiencies, enable new products and design better ways to sell and service insurance. But the strengths of the industry have always been its people and its passion for helping individuals and businesses to address the risks inherent in their lives and business operations. That passion was evident in the many serious and purposeful discussions that took place over the three days in Las Vegas.

Leadership Lessons for My Newborn

Bowen Thomas Swift was born on Wednesday, Aug. 12, at 6.45am. His buddies call him Bo. Weighing in at 6 pounds, 14 ounces, Bo is 20 inches long, has a normal-sized head (which, if you know either of his parents, was a huge relief) and like any baby is completely and utterly dependent on his parents. He is a blank canvas.

So, listen up, son. Here is some advice about how to be a leader, about how to work with people, about business and about life:

Lead with compassion. One of the greatest opportunities in life will be the opportunity to lead people. But remember, with this opportunity comes huge responsibility. The people you lead will look to you every single day for two things: direction and guidance. The words that you choose and the tone that you take will matter at all times. So what kind of leader will you be, Bo? Always, always, always remember to take the individual into consideration first. Serve others, and the world will reward you 10x. There will be times when you may question the actions and decisions of those around you. Always assume the best of people. Take the time to get to know people. Always be open to learning and the perspective of others. Slow down, ask questions and seek to understand. Always be compassionate.

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Live the vision, breathe the mission. Leadership can be defined as the ability to inspire others to achieve a shared objective. The two words that jump out for your dad are “inspire” and “shared.” People will go the extra mile when inspired to do so. But remember, son, they must understand the bigger picture and their individual roles in the mission to be really inspired. Then live the mission, Bo. Live every single moment of every single day. Be passionate. Life is too short.

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Be open, honest and constructive. Feedback is a gift. As a leader, you will have the responsibility to provide feedback. Good and not so good. Both are equally important to the recipient. But, Bo, you must earn the right to give feedback to people. If you don’t earn the respect of those around you, they won’t listen to you, buddy. Always be respectful. People don’t plan to mess up. They don’t wake up in the morning and say to themselves: “Today I’m going to do everything I can to fail.” When the time is right, and you’ll know when, always be open, honest and constructive with feedback. Constructive, for me, is the most important word. Show peopl a path. Guide them down it.

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Make fast, high-quality, data-driven decisions. By the time you get the chance to lead people, the world will be moving way more quickly than it does today. And, son, it moves pretty damn quickly already. Don’t ever make decisions based on a gut feeling. Even when you are under pressure to make a quick decision. We live in a world of big data. You may have a gut feeling about a topic or, as your dad calls it, a hypothesis (thanks, Mike Derezin). But prove your hypothesis with data before you pull the trigger on anything. Business or personal. Slow down to speed up.

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Collaborate to win. The most successful people in the world are the ones who know how to collaborate. They are self-aware enough to know what they bring to the table. But they also take the time to understand the skills, ability, knowledge and experience of those around them. You will not succeed in life, Bo, if you try and go at it alone. And by the way, son, life is way more fun when you respect and work in partnership with those around you.

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Keep things simple. Right now, you eat, sleep and poop. As you get older, you’ll be pleased to know that you’ll have the opportunity to do more things. You will engage with people. People are interesting, but they can bring complexity to life if you let them. As their leader, you will have the job of listening to the complexity, deconstructing their challenges, helping them simplify, helping them get to the core of an issue or a challenge and then sending them on their way. And, please, don’t use 400 words when 10 well-chosen words will suffice. Keep things simple.

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Work hard, play hard. We all have to work, Bo. Life is expensive. But please pick something that makes you happy. Do something you are passionate about. Whatever you choose, remember to have fun. Don’t take yourself too seriously. I don’t, and it has served me well. Don’t be afraid to laugh at yourself. You’ll work hard. You’re a Swift. But always strive for balance in your life. Work to live, don’t live to work. Be present for those around you. There will be so many distractions. Life will get hectic if you let it. And, son, remember to breathe.

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That’s a wrap, Bo. Thanks for listening.

The Key to Building Effective Risk Culture

Building an effective risk culture is much more than changing your organizational culture in line with your vision, mission, corporate values and risk appetite — you must factor in the interests of competing national cultures, sub-cultures, Maslow’s theory on individual self-actualization and the informal groups in the company.

The interactions among all of these are not predictable, and variables cannot accurately be isolated.

An effective risk culture is not a matter of risk assessment or level of compliance; it is a matter of “conviction” — a corporate state of mind where human beings can take well-informed risk decisions because they want to, not because they have to.

ERM policies, systems and reporting dashboards are all part of the foundation for good risk management. Once you have all of these in place, you can start building an effective risk culture. Remember also that there is too much complexity and subjectivity in culture to assume that individual reactions and responses can be aggregated to reflect or give an accurate picture of the whole organization’s  risk culture. You cannot “pop” an effective risk culture in the microwave; it takes a lot of preparation, dedication and time to get it to perfection.

You can have the best staff retention rates in the industry or the most awards for long service — both of these can also indicate a high risk of employee fraud. According to ACFE research:  53% of fraudsters have more than five years of  service and the median loss for fraudsters with six to 10 years of service is $200 000. 52% of fraudsters are between 31 and 45 years old, and older fraudsters tend to cause larger losses.

Scanning the horizon might just be the most important thing to do. You cannot control or stop what is coming; you have to prepare to respond to it. So many organizations spend large amounts of money to focus and report only on what is happening inside the organization, where they actually have control. Your biggest risks are outside of the organization, where you have no control.

Key elements for the future of your risk strategy should include internal networking; you have to talk to the informal groups and their informal leaders just as much as you do talk to the executives and managers, maybe even more. The real business does not always get done in the formal “boxes and lines” structure.

Just as important are the aspects of desk research and external networking. To have a good risk management strategy and action plan, you have to know everything about your industry, markets, competitors, supply chain, alternative supply chain, global risks in a connected world and many more. Failure to adapt your business model to the ever-changing internal and external risk environments will lead straight to the corporate graveyard.

The future of risk management is just: “risk management through people.” You can have the best systems, great models and scenario analysis with elaborate dashboards; at the end of the day a person will take a decision.

Are your employees aiming at more than one target, or do you have a clearly defined risk for reward strategy and risk appetite statement to guide them? Business strategy and risk culture are parts of an interdependent system.

Start working on your success by training every employee with some basic risk management skills.

As my Moody’s colleague Sarah Tennyson wrote last year: “Enterprise-wide risk management requires a shift in the behavior and mindset of employees across an organization. To realize the full benefits of improved systems, tools and analytical skills, people need to learn new ways of perceiving situations, interpreting data, making decisions, influencing and negotiating.”

This was originally published at Zawya.