- 40 years experience in the property casualty insurance industry, including top leadership roles at four companies: ePolicy.com, the Fireman's Fund, the Argonaut Group and Cigna.
- 10 years as president and CEO of the Insurance Educational Association, a training and development company providing professional education at all points on the underwriting and claims career path.
- As officer in charge of products at ePolicy.com. a web-based insurance broker and policy administration company, developed the industry's first fully web-based commercial package policies.
- Expertise in change management, turnarounds, financial management, business development, staff development.
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Change Management and People Development in the Property Casualty Insurance Industry
- Retirements of long-time top managers and thought leaders is threatening the industry.
- When the recession hit in 2008 and 2009, most companies did everything they could to cut costs. Experienced top managers kept their jobs because of their institutional knowledge and experience, but many mid-managers and operating staff were laid off as companies cut payroll.
Companies were doing anything they could to survive. No one was able to soften the impact of those layoffs as the company survived, made it through to 2015, and started to experience the retirement of long-time managers and senior underwriters, claims adjusters and marketing staff. There's really no bench strength in experienced staff. There are entry level people who've been hired in the past few years, and a group of older employees who are beginning to retire in droves. There's a huge gap appearing "in the middle."
- There is no in-house training.
With few exceptions, such as Farmers and USAA, and exquisitely targeted companies like Progressive, there is no in-house training. In the mid-1970s, there were quite a number of proud, well-capitalized, well-managed companies that had extensive in-house training programs. College graduates would join a large national company and go through a six-month to one-year almost collegiate residential training program. Those programs have mostly disappeared.
When a company that realizes this industry trend is a problem, it typically has little or no in-house training or educational expertise, nor is there money for the creation of an in-house training facility. Most multi-line companies now understand this is a problem they need to address. The specific training needs, though, can vary from company to company. Those needs can depend on the personality and the work habits of business unit or line-of-business top managers, because whether knowledge got passed on to middle managers is often dependent on the ethos of top managers.
- Recruiting entry-level people has been very difficult.
- There is a surge of entry-level hiring right now for two reasons. First, there's the increasing turnover in the experienced ranks, and second, the economic recovery means that insurance companies need more employees.
Insurance does reflect the current state of the economy in that as employers expand, hiring increases and output increases. There is a demand for more insurance, and not just in terms of limits but also in terms of new businesses being formed or business organic growth; and therefore, a greater need for the product. But the improving economy also means that younger people have a broader choice of potential employment. And the insurance industry in general has done an abominable job of presenting a career in the business as an attractive possibility.
There is a widespread and totally incorrect impression of what a career in the insurance industry is. A general impression is that the job involves sitting at someone's dining table and getting them to buy an insurance policy. In fact there is a wide variety of jobs available that are good careers with decent working conditions, pleasant surroundings and great benefits. This should be attractive to a serious recent college, community college or even high school graduate.
The negative general impression makes for very difficult recruiting, and the recruiting is getting more difficult month by month as other companies, particularly those in the knowledge space, internet commerce and technology are also increasing their hiring.
- Many entry-level employees require remedial training.
The quality of many of today’s graduates – in terms of their preparedness for a job other than text messaging – is very poor. In general, there is an inability to articulate coherently, to act in a socially appropriate manner with people that are not part of their close circle of friends, and to ignore the last 10 Twitter messages and focus on the conversation at hand. The quality of written communication skills is just plain scary.
The insurance industry needs people who have those business communication and behavior skills. Internally, there are any number of team-associated decisions that require face-to-face interaction. Externally, because you’re dealing with independent agents and brokers, you need developed social and oral and written communication skills. What we tend to see is entry level people whose skills in these areas are very low.
These needs are not particular to the insurance industry. The industry needs people who can write a coherent or paragraph. It needs people who have the ability to concentrate for 30 to 60 minutes on the analysis of a particular risk or to thoroughly read through a lawyer’s observations on a particular claim and then take a sensible course of action. These are skills you would hope any decent high school graduate would have. But that's not what people in the industry are seeing.
- The number of independent insurance agents and brokers is declining.
In the segment of the insurance industry that sells its products through independent insurance agents and brokers, those agents and brokerages are dwindling in number (although the number of individual producers is holding steady).
Agencies in particular are often family-owned. They establish long-term and close business relationships with regional companies and the local offices of national companies in their area. It’s a very high-touch, very personal relationship. These smaller agencies are quickly disappearing because the owner is:
- Unable to pass the business on to his or her family, because in most cases the sons or daughters are simply not interested.
- Or, unable to compete with more sophisticated competitors or gain access to insurance markets with larger regional or national companies and brokerages.