Berkshire Hathaway GUARD Insurance Companies: scaling insurance across an evolving landscape
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The secret behind Berkshire Hathaway GUARD Insurance Companies’ growth WRIT TEN BY
L AUR A MULL AN PRODUCED BY
ANDY TURNER
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B E R K S H I R E H AT H A W AY G U A R D I N S U R A N C E C O M PA N I E S
Competition may be rife in the insurance sector but Berkshire Hathaway GUARD Insurance Companies is proving it has the right strategy for success
P
erhaps no greater question faces companies today than: ‘How do I scale my business?’ Nowadays,
business headlines are inundated with stories touting the best tips and tricks for growth but surely, more than anything, it’s better to follow in the footsteps of a company which 04
has done it before? Insurers searching for the best tried-and-tested methods to scale their business need look no further than Berkshire Hathaway GUARD Insurance Companies, a fast-growing trailblazer in the US insurance market.
PREPARING THE FOUNDATIONS FOR GROWTH Since its founding in 1983, GUARD companies have gone from strength to strength and today, now known as Berkshire Hathaway Guard Insurance Companies, the business stands as a prominent subsidiary of Berkshire Hathaway – underwriting through its insurance companies: WestGUARD, AmGUARD, EastGUARD, NorGUARD and AZGUARD. The group provides commercial (and, most
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B E R K S H I R E H AT H A W AY G U A R D I N S U R A N C E C O M PA N I E S
“ We’re growing every year by 20-25% which shows that this is not a steady state company” — Sy Foguel, CEO and President, Berkshire Hathaway GUARD
was Executive Vice President. “At the time the company was writing around US$200mn of Workers Compensation premium in a dozen states,” he recalls. “Our vision from day one was to use the company as a platform to become a one stop shop for the insurance needs distributed by our agents. We started to introduce additional lines of coverage and built all the infrastructure.” Later in 2012, the organization changed hands again and became a wholly-owned subsidiary of National
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recently, personal lines) insurance
Indemnity Company, which is part of
coverage and services to businesses
the Berkshire Hathaway Group. “Today,
of all types in the US. In fact, in 2017,
we are a $1.6bn company,” Foguel
the group issued over 250,000 policies
adds.
to businesses across the country.
COO Carl Witkowski, who has been
However, this success wasn’t achieved
with the company in different roles
because of luck or ‘just good timing’:
since 1989, adds that before gaining
throughout its history Berkshire
the backing of Berkshire Hathaway,
Hathaway GUARD has worked hard to
GUARD first had to forge its own path
redefine and reshape its strategy,
in the insurance market. “We were a
aligning the organization to achieve
small regional company and there
meteoric growth.
were two key things we had to offer:
The CEO, Sy Foguel, joined the
superior service and efficiency,” he
company in 2007 when the group was
observes. “Our retail agents are a key
acquired by Clal Insurance Enterprise
part of our DNA – they’ve been our
Holdings Ltd., an international insur-
distribution force.” Like any small
ance group of which he
operation, efficiency has always been a
07 well-versed mantra at GUARD. “We
company,” Witkowski recalls. “I was
needed to be efficient to survive as a
brought in to hone its processes,
company and so our expense ratios
create efficiencies and develop a
needed to be managed,” he continues.
managerial infrastructure.” As part of
“When we were later acquired, it was a
this process, the enterprise re-plat-
great example of when preparation
formed directly onto a browser-based
meets opportunity.” Critically, as the
modern architecture and went
insurer has continued on its upward
increasingly paperless – readying itself
trajectory, it has taken care to retain
for a digitally-savvy future. “We
this same start-up philosophy and
probably had one of the first browser-
mentality.
based client systems in the United States,” adds Witkowski. “We also
SPEARHEADING DIGITAL TRANSFORMATION
insurance companies, with both
“In 1989 GUARD was a small two-state
accomplishments partially enabled by
became one of the first paperless
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B E R K S H I R E H AT H A W AY G U A R D I N S U R A N C E C O M PA N I E S
08 our R&D approach to technology
organization a significant edge.
yielding over a dozen patents.” With a
“Whether it’s for claims processing or
wealth of experience in insurance,
policy selection and pricing, we
Witkowski has witnessed firsthand
always manage data down to the
how the sector is moving from the
scintilla level. This means we can
paper-based work of the past towards
provide our analysts and actuarial
a new age powered by technology
staff the data they need to make good,
and data.
real-time decisions,” he explains.
Many businesses contend that data
Digital transformation can put a
is the ‘new oil’ and the same sentiment
strain on any business’ wallet but at
rings true at Berkshire Hathaway
Berkshire Hathaway GUARD, the
GUARD. With reams of data at the
enterprise has shrewdly taken a build,
insurer’s fingertips, Foguel, who is an
rather than buy, approach. “A lot of
actuary by profession, believes that
resources, time and effort are
this appreciation of data gives the
consumed when companies decide to
E XE CU T I VE PRO FI LE
Sy Foguel As Chief Executive Officer and President, Sy Foguel leads the strategic planning and positioning of the organization, helping to promote initiatives that make realization of both short- and long-term goals possible. His involvement with the company has been marked by numerous accomplishments. While at Clal Insurance of Israel, he was the individual who first recognized the potential of a small, regional monoline carrier (i.e., GUARD in 2006) and was instrumental in the acquisition of this organization in 2007, which ultimately resulted in him being named Chief Executive Officer and President of GUARD. Since 2007, the company’s annual premiums have more than tripled (despite very challenging economic times) while maintaining a combined ratio well below industry peers and diversifying into new lines of property and casualty coverage. In 2012, he then helped orchestrate the profitable sale of GUARD to Berkshire Hathaway Inc. (specifically National Indemnity Company) and has continued in his role as CEO/President — rebranding the group as Berkshire Hathaway GUARD Insurance Companies and becoming a nationwide carrier Prior to his current tenure, Foguel had accumulated diverse international, executive-level insurance industry experience, including roles as CEO of IDI Bituch Yashir of Israel, Executive Vice President of Clal Insurance of Israel, and Senior Vice President of Arch Insurance in the United States as well as being in charge of other international insurance ventures such as a Lloyd’s Syndicate and a Romanian entity. Sy is an honors graduate of the Computer Engineering and Mathematics Faculties at the Hebrew University in Jerusalem, is a certified actuary in both the US and Israel, and is a member of several actuarial societies in both countries (ACAS, FILAA).
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B E R K S H I R E H AT H A W AY G U A R D I N S U R A N C E C O M PA N I E S
E X ECU T I VE P RO FI LE
Carl Witkowski
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Chief Operating Officer Carl Witkowski joined the organization in 1996 after working for nearly a decade as a consultant. Throughout his tenure, he has spearheaded numerous initiatives such as transforming the organization to 100% paperless processing in the early 2000’s and leading the re-platforming of our proprietary systems to a browser-based environment. Similarly, Witkowski’s prior leadership experience in the health care field has enabled him to serve a key role in formulating and shaping managed care strategies that have allowed Berkshire Hathaway GUARD to excel in delivering superior claims service that provides quality care to injured workers while containing costs. As current President of GUARDCo, he ensures standards of excellence and best practices are achieved. As part of his current duties, he leads Berkshire Hathaway GUARD’s information and technology group and is also “curator” of the company’s “human capital” and culture. In 2001 (the only year the company participated), GUARD was named the second Best Large Place to Work in Pennsylvania. All operational units currently fall under Witkowski’s leadership, including Claims processing, Small and Intermediate Business Unit underwriting, and Customer Service and Support functions. Witkowski has extensive past management, executive, and leadership experiences. He exited his two-decade career in behavioral health as Clinical Director of one of Pennsylvania’s most diverse behavioral health organizations. He was also engaged in private practice (providing both clinical counseling and management consulting), was a graduate faculty member of Marywood University for 12 years, and is a frequent presenter on information technology and human capital topics at national conferences.
“Our retail agents are a key part of our DNA – they’ve been our distribution force” — Carl Witkowski, Chief Operating Officer and Executive Vice President at Berkshire Hathaway GUARD
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B E R K S H I R E H AT H A W AY G U A R D I N S U R A N C E C O M PA N I E S
replace their policy administration system, portals, claims system, or spend their time integrating multiple
1983
Year founded
third-party systems” observes Witkowski. “It distracts the business and slows it down. Because of this, we don’t replace any systems. Instead, we evolve our systems. Therefore, we don’t waste the resources and we don’t throw away that investment. However, we still must make the system very easy for an agent to use, as we don’t work directly 12
with consumers.”
500+
Approximate number of employees
HQ
Wilkes-Barre Pennsylvania
LEADERSHIP AND COLLABORATION: A PERFECT MIX
success is our ability to make deci-
Technology may be a fundamental cog
sions quickly. We’re also flexible
in any business growth strategy but
enough to implement them on a very
when it comes to true success, it’s
quick timeline.” The insurer has taken
ultimately down to the people.
this positive work culture one step
Abandoning hierarchies in favor of a
further using technology: by creating a
culture that “rewards individual perfor-
robust agency portal and leading call
mance and celebrates team accom-
center, the firm has strived to create a
plishment”, Foguel points out how
close-knit culture between the
“everyone treats this company as
company and its agents.
though they have ownership in it – there’s respect for one another”. “There are never more than three or four degrees of separation in the
company,” he notes. “Our greatest
In all aspects, it seems agility is interwoven into the company’s DNA. This not only applies to technology: indeed, Berkshire Hathaway GUARD
13 has worked diligently to offer bigger
collision avoidance system and fleet
and better product propositions to its
management systems (FMS) technol-
customers. “GUARD itself is not a new
ogy for its commercial auto lines, and
company but in the last decade we’ve
a project with Plank Re to use AI to
acted like a fast growing startup,”
further automate the workers’ com-
enthuses Foguel. “We’re growing
pensation underwriting process.
every year by 20-25% which shows
Berkshire Hathaway GUARD is truly
that this is not a steady state company
a strong role model for how to
in any form. We’re always innovating
profitably scale quickly and steadily.
and we always have four or five
Businesses should keep an eye on the
projects on the go.” In fact, just last
firm to see what they’ll do next.
year the firm announced various partnerships with IoT companies and AI applications, including a pilot with Safe Drive Systems (SDS), to create a w w w.gua rd . com
Berkshire Hathaway GUARD Insurance Companies Berkshire Hathaway GUARD P.O. Box A-H Wilkes-Barre Pennsylvania 18703 U.S.A. www.guard.com