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Contents
BRACE FOR IMPACT
26
Leadership in Insurance
‘My Airplane’: Don’t Let Fear Keep You From Taking Action
Guest Editor Don Bailey recounts witnessing the “Miracle on the Hudson” and describes how learning more about Captain Chesley Sullenberger’s decision to take control of a crashing plane helped Bailey find the courage to act to change the direction of his own life.
By CM Guest Editor Don Bailey, Partner, Bristlecone Partners
29
Fountains and Drains
There are two types of people: fountains and drains. The first is filled with positivity, hope and purpose that inspires others. The second depletes others’ resources by focusing on negative thoughts and emotions, according to author Don Bailey, who gives examples of two former colleagues who fit into each of the categories. “We’re not genetically pre-programmed to be a fountain or a drain. We decide—every day,” he writes, explaining steps to take to embrace the fountain mindset and run from drains.
By CM Guest Editor Don Bailey, Partner, Bristlecone Partners
Don Bailey is the Guest Editor for the section of Carrier Management magazine featuring articles about leadership. Bailey is a Partner with Bristlecone Partners, a Madison, N.J.-based coaching, consulting and leadership development firm, with an emphasis on leadership guided by neuroscience principles. In addition to his coaching and consulting business, Bailey currently serves on the Board of Advisors of ICG/SageSure and Zywave. Read more about him on page 28.
32
Beware of Always or Never
“A one-truth mindset equates to intellectual laziness. The harder effort is in the middle,” writes CM Guest Editor Don Bailey, warning leaders against sticking to binary belief systems of always or never. Such extremism divides us as people, teams and organizations, he says, advising readers to find the gray middle area by embracing intellectual humility, seeking different perspectives and finding common ground.
By CM Guest Editor Don Bailey, Partner, Bristlecone Partners
34
‘Finding Meaning’ Amid the COVID-19 Pandemic
Deaths from and during the COVID-19 pandemic will produce more cases of complicated grief, where a person’s grief inhibits them from functioning, observes Heather Althoff, the Managing Partner at Bristlecone Partners. Here, she shares what she learned from David Kessler’s book, “Finding Meaning: The Sixth Stage of Grief.”
By Heather Althoff, Managing Partner, Bristlecone Partners
36
No Events = No Networking? CM Guest Editor Don Bailey shares ideas about future in-person events, as
reimagined by someone in his network who is an executive in the event space. Bailey also offers ideas for network-building activities for insurance professionals to engage in in the meantime (without using Zoom).
Janet Dell, Chief Growth Officer, Freeman Company interviewed. www.carriermanagement.com
JULY/AUGUST 2020 | 3
Features JULY/AUGUST 2020
7 8 9 13 15 18 21 23 38 40 43 44 46 48
Risk Alerts
Swiss Re’s Risk Radar Hurricanes and COVID-19 By Karen Clark, President, Karen Clark & Company Managing a Pandemic: Are There Lessons From Catastrophe Modeling? By Karen Clark, President, Karen Clark & Company The Risk of ‘Take-Home’ COVID-19 and the ‘Next Asbestos’ By Melissa Boudreau, VP of Modeling, and Robert Reville, CEO, Praedicat Emerging Risks to Watch: Pandemic and Privacy Exposures
Claims 2020
Nuclear Verdicts: What Property/Casualty Carriers Need to Know By Robert F. Tyson Jr., Strategic Managing Partner, Tyson & Mendes LLP Is COVID Physical Damage? Holistic Workers Comp: Moving Beyond the Physical
Executive Viewpoint
To Avoid Being COVID-19 Villains, P/C Insurers Need to ‘Overcommunicate’ By Richard Levick, Chair and CEO, LEVICK
Executive Profile
From IT Leader to CEO: A Natural Path for Westfield’s Largent Ed Largent III, President and CEO, Westfield, interviewed
Special Report: Leading When the World Restarts What’s Next?
Flexibility and Patience Helping Insurance Leader Through COVID Challenges By Bob O’Leary, Chair and CEO, Philadelphia Insurance Companies Walls Between Life and Work Come Down By Dan Malloy, CEO, Third Point Re Creating Certainty: Now and in the Future By Phil Kalin, President and CEO, Pinnacol Assurance
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Features JULY/AUGUST 2020 VOLUME 7, NUMBER 4
49 50 51
Next Insurance: Getting Small Businesses Back to Work By Guy Goldstein, CEO, Next Insurance Leading Through a Storm With No Clear End By Mitch Livingston, President and CEO, NJM Insurance Company Situational, Authentic Leadership Needed for Crisis and Beyond By Tony Kuczinski, President and CEO, Munich Re US Holding
52 53 54 55 57
The Big Picture: How COVID Should Change the Industry
59 60 62 64
My First Days of Leadership—During a Global Pandemic By Scott Gunter, CEO, AXA XL
Pandemic Reinforces Innovation Culture at Root By Alex Timm, Co-Founder and CEO, Root Insurance Co Clarity Critical for Startups in Crisis By Jay Bregman, CEO and Co-Founder, Thimble Overcommunication: A Leadership Lesson From the Crisis By Martin Micko, Founder and COO, omni:us How AM Best’s Workforce Stays Productive, Maintains a Sense of Belonging By Matthew Mosher, President and CEO, AM Best Rating Services
Leadership Tips
Leadership Tips: Don’t Let Negative Emotions Take Control
Technology and Analytics
Increasing the Value of Insurance in an On-Demand World By Andy Clapson, Data Science Lead, Slice Labs In 2020 InsurTechs Come Down to Earth
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JULY/AUGUST 2020
www.CarrierManagement.com Critical Information for P/C Insurance Company Executives & Directors Publisher Mark Wells | mwells@wellsmedia.com CARRIER MANAGEMENT EDITORIAL Executive Editor Susanne Sclafane | ssclafane@carriermanagement.com Chief Content Officer Andrew Simpson | asimpson@wellsmedia.com Editor Mark Hollmer | mhollmer@carriermanagement.com International Editor L.S. Howard | lhoward@carriermanagement.com Assistant Editor Kimberly Tallon | ktallon@carriermanagement.com CARRIER MANAGEMENT DESIGN Vice President of Design & Production Guy Boccia | gboccia@wellsmedia.com Graphic Designer Melissa Reese | mreese@wellsmedia.com CARRIER MANAGEMENT ADVERTISING/MARKETING Chief Marketing Officer Julie Tinney (800) 897-9965 x148 | jtinney@wellsmedia.com Director of Marketing Communications Derence Walk | dwalk@wellsmedia.com Chief Relationship Officer Gayle Wells | gwells@wellsmedia.com Advertising Coordinator Erin Burns (619) 584-1100 x120 | eburns@wellsmedia.com CARRIERMANAGEMENT.COM WEB Web Team Lead Nathan Huebner | nhuebner@wellsmedia.com Web Developers Jeff Cardrant | jcardrant@wellsmedia.com Terrance Woest | twoest@wellsmedia.com Ryan Kleshinski | rkleshinski@wellsmedia.com James Wagoner | jwagoner@wellsmedia.com Vice President-New Media Bobbie Dodge | bdodge@wellsmedia.com WELLS MEDIA GROUP Wells Media Group includes Carrier Management print and web publications, Insurance Journal print and web publications, Claims Journal web publication, the MyNewMarkets.com online directory, and the IJ Academy of Insurance. Executive Chairman Mark Wells | mwells@wellsmedia.com Chief Executive Officer Joshua Carlson | jcarlson@wellsmedia.com Chief Financial Officer Mark Wooster | mwooster@wellsmedia.com SUBSCRIPTIONS: Circulation Manager Elizabeth Duffy at: eduffy@wellsmedia.com Carrier Management, which provides Critical Information for P/C Insurance Company Executives and Directors, is published six times per year by Wells Media Group Inc., 3570 Camino del Rio North, Suite 100, San Diego, CA 92108-1747. Phone: 1.800.897.9965. Standard Postage Paid at San Diego, CA and at additional mailing offices. DISCLAIMER: While the information in this publication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2018 Wells Media Group Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. POSTMASTER: Send change of address form to Carrier Management, Circulation Department, 3570 Camino del Rio North, Suite 100, San Diego, CA 92108-1747. ARTICLE REPRINTS: For reprints of articles in this issue, contact us at (800) 897-9965 x125 or reprints@carriermanagement.com for info.
JULY/AUGUST 2020 | 5
From the Editor Reinventing Normal
I
f you were born just a few years ago, and started to understand the world today, then wearing a mask to go outside wouldn’t seem like a very big deal. And the fact that your parents were always around and that you connected with people in other houses by phone or computer would seem normal, too. You would have no other experience to compare it to. I started thinking about this, oddly, when I was listening to Nationwide P/C COO Mark Berven respond to a question from Bold Penguin’s Ilya Bodner during an interview for InsureTech Connect about innovation in late May. Berven talked about virtual inspections that Nationwide is doing these days to replace physical ones during COVID-19 lockdowns. Bodner, a veteran of the insurance industry, shared that he had recently filed his first-ever property claim—a flooded basement—and was uncomfortable with the prospect of a stranger walking through his house to inspect the damage. Berven said videos uploaded by customers, together with estimation software, are fast becoming parts of the claims adjuster toolkits. “We did ask customers to do a little bit of work, [but they] didn’t have to wait to schedule an appointment, they didn’t have to drive that car to a shop to get that estimate, they didn’t have to wait for the property inspector to come out.” And they probably got their claims handled quicker. I wondered: How does the customer see it? Too much work? Better? faster? Maybe the digital experience is efficient, or even good enough to Tweet about, but the young driver reporting his first accident has no point of reference for a five-minutes-and-done claims experience. If normal is now, how do we get better? The question applies beyond insurance claims, sales and underwriting innovation to all facets of our lives—interacting with our families, leading our teams, managing ourselves. Focusing just on claims, we have a different example. For small businesses waking up to the fact that insurance doesn’t cover their business interruption losses, their first experience is horrible. Again I ask: If normal is now, how do we get better? Businesses can’t reopen without worrying about the threat of another economic shutdown this year. While industry advocates say the risk-transfer problem is big and needs time to solve, businesses don’t have the time to wait. It has been nice to hear leaders talk about the speed at which physical claims handling innovation is happening—with better customer experience as the focus. But we need to reinvent a better normal across the spectrum of what we do today—and what we don’t do. I can’t help but feel sad today about how things seem to change us, and then they don’t. When I was a kid, the fact that teenagers and 20-somethings who I looked up to were protesting about the war in Vietnam, about Civil Rights, about the environment seemed normal. And then there weren’t any protests anymore, for a while. With hope for lasting change, I’ll end with some random things I’ve heard in recent weeks about reinventing normal.
• “Over the course of any given day, we can encounter an inflection point, a situation that suggests we need to take action. But often we don’t see it. Or we might see it, but we don’t have the courage to act.” • “We’re going to have to explore solutions that go beyond what our current model is around post-loss indemnification and instead drive mitigation to maybe bring losses to a level within our capacity to absorb as an industry.” • “This is a ‘never-look-back’ moment of accelerating into the future.”
First quote from "My Airplane” by CM Guest Editor Don Bailey, CEO of Bristlecone Partners, p. 26, on the topic of personal life changes. Second quote from CM online article, “Diverging Views: Is COVID a One-Off Cat or Not?,” quoting Sherman Power, the U.S. ReSolutions Leader at Aon, speaking at the Casualty Actuarial Society Spring meeting about the systemic nature of industry losses from COVID-19. Third quote from Sean Burgess, Chief Claims Officer of USAA, speaking at the April 30 Insurance Nexus by Reuters conference, “Claims Like Never Before: Agility, Leadership and Collaboration for a Seamless Claims Experience” available on YouTube. Send your feedback to Susanne Sclafane at ssclafane@ carriermanagement.com
Susanne Sclafane, Executive Editor 6 | JULY/AUGUST 2020
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Risk Management
Swiss Re’s Risk Radar
S
wiss Re’s annual SONAR report, published in early June, highlights 14 emerging risks that will impact different sectors of the insurance industry in different time frames. The accompanying chart summarizes the five risks identified in the report as those that will impact property/casualty insurers and reinsurers within the next three years.
1. Why edge computing made the list.
Edge computing allows IoT data to be transferred and processed at rapid speeds by putting computing power close to the connected end-devices themselves, according to the report. The addition of more and ever-evolving interconnected devices to a network, however, increases potential cyber attack surfaces. With edge computing increasingly playing a role in manufacturing, utilities and other areas, cyber incidents can cause machine failure or malfunction, leading to business interruption. In connection with autonomous vehicles or health-critical devices, the prospect of injuries and fatalities is also real. Beyond system vulnerabilities, the report notes that data collected and consumed “at the edge” can also be vulnerable to environmental conditions. “This adds physical challenges to the maintenance of devices.” Then there are the potential vulnerabilities of the “Internet of forgotten things.” Edge computing “heightens cyber risk potential from underservice, negligence and blind spots,” the report says, noting that devices that stay connected to the network beyond their projected life spans, without updates and security patches, invite attackers.
2. Why pharmaceutical supply chain issues made the list. The offshoring of
drug production increasingly concentrated foreign producers in emerging markets and has direct implications for life/health
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insurers. But drug shortages triggered by plant explosions in China, or even export bans of certain medicines from India, can affect P/C insurers as well. Among the potential P/C impacts are medical malpractice claims against hospitals, doctors and pharmacies related to mistreatment or use of alternative drugs; product liability and recall events from alternative drugs made under less stringent standards.
3. Why lithium batteries made the list.
While fire risks are the most prominent P/C risks tied to the lightweight batteries powering mobile devices, the Swiss Re report describes the potential for workers compensation, environmental liability and transportation claims, too. On the environmental front, the report notes fighting lithium battery fires involves cooling them in water, but then the contaminated fire-fighting water and toxic gases must be properly handled to avoid environmental damage.
4. Why “smart everything” made the list.
The report describes the complexity of product liability issues—mainly the challenge of assigning liability—for products that become digitized and subsequently fail. “If software is an integral part of a good, a modification or failure on the part of the producer or distributor to deliver updates could potentially make the product unsafe to use.”
5. Why the DIY biotechnology movement made the list. Deliberate or accidental
releases of new biological threats in the form of synthesized micro-organisms are among the risks of proliferating biotechnology do-it-yourself kits, the report says. “Enabling of amateur synthetic biology…may incite criminal and terrorist activity.” Other risks that could impact insurers include: liability claims when antimicrobial resistances are triggered from DIY synthetic biology; environmental claims related to the release of modified bacteria and other microbials.
5 Risks Impacting P/C Insurers and Reinsurers Near Term: 0-3 Years Emerging Risk Edge computing and cyber breaches Breaks in pharmaceutical supply chain Lithium battery fires Assigning product liability: Smart everything challenges DIY synthetic bio hazards Source: swissre.com/SONAR2020
Impact High Medium Medium Medium Low
5 Risks Impacting P/C Insurers and Reinsurers Longer Term: Beyond 3 Years Emerging Risk Carbon removal and insurance Vaping and e-cigarettes Green buildings: Will they pass the test of time? Hydrogen fuel cells Smart dust
Impact High Medium Medium Low Low
Source: swissre.com/SONAR2020
JULY/AUGUST 2020 | 7
Risk Management
Hurricanes and COVID-19
T
By Karen Clark he 2020 hurricane season will be an active one, according to all of the major forecasters. Colorado State University said there is a 69 percent chance there will be a major U.S. landfalling hurricane. The tally began early with two tropical storms in May—ahead of the official start of the season on June 1. KCC analyses suggest insurers should anticipate larger-than-normal losses if hurricanes do make landfall this year due to complications caused by COVID-19. Pandemic mitigation measures will make preparing for impending hurricanes more difficult for property owners, and it will cost more to repair hurricane damage that does occur. Contractors will require personal protection equipment (PPE) and may limit the number of workers on a site to comply with social distancing requirements. The longer it takes to make repairs after a storm, the higher the cost of those repairs. Smaller event losses—those at the low return periods of the Exceedance Probability (EP) curve— will likely increase proportionately more because contractors Karen Clark, the President may be less willing to of Karen Clark & Company, incur the costs and is internationally risks of COVID-19 to recognized as the founder make minor repairs, of the first catastrophe and insurers may modeling firm and as the decide to settle small expert in the field of claims remotely. On the catastrophe risk other hand, the longassessment and return-period losses, management. She may be such as the 1-in-100reached at info90410@ year losses, already karenclarkandco.com. incorporate significant
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demand surge that accompanies large event losses, so larger losses may increase less on a percentage basis. Of course, in terms of actual dollars, the increase in losses rises steadily across the EP curve. For example, the 100-year industry hurricane loss increases from $154 billion to $170 billion in the COVID-19 environment.
See related article, “Managing a Pandemic: Are There Lessons From Catastrophe Modeling?” on the next page.
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Risk Management
Managing a Pandemic: Are There Lessons From
Catastrophe Modeling? Executive Summary: Best practices that have evolved around the use of natural catastrophe models have value for managing future pandemics, writes risk modeling expert Karen Clark. Among them is the use of probability distributions around important model outputs—fatalities and hospitalizations in the case of pandemics—reflecting the uncertainty around model assumptions such as transmission and fatality rates. Continuous model revisions to incorporate new data and the use of random data samples are other takeaways from hurricane and earthquake modeling that would be useful for pandemics.
C
By Karen Clark OVID-19 isn’t the first and won’t be the last pandemic to threaten the well-being of the global population, but it will likely turn out to be the worst in the last 100 years. It would be hard to argue that the handling of this crisis has been ideal, and there is much to be learned and improved upon before the next virus strikes. Policy responses should be based on the science and the data, but because there is so much uncertainty around the data in the early phases of a pandemic, and in particular the data used in the pandemic models, a more
robust framework for leveraging the science is called for. As the insurance industry knows very well, despite wide inherent uncertainty, robust models used correctly can be valuable tools for decision-makers. Insurers also know that models can produce widely divergent results, so it’s imperative to understand the model assumptions, the variability around those assumptions and what’s ultimately driving the
Karen Clark, the President of Karen Clark & Company, is internationally recognized as the founder of the first catastrophe modeling firm and as the expert in the field of catastrophe risk assessment and management. She may be reached at info90410@ karenclarkandco.com.
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JULY/AUGUST 2020 | 9
Risk Management continued from page 9 model output. Best practices that have evolved around the use of catastrophe models have value for managing future pandemics.
Probability Distributions vs. Deterministic Scenarios
The catastrophe models are complex and include many random variables represented by statistical distributions that are used to generate a large sample of potential outcomes. The primary output of the catastrophe models is a complete probability distribution providing insurers with the full range of losses and the probabilities of exceeding losses of different sizes. Rather than deterministic “best” and “worst” case scenarios, it would be useful for policymakers to have more complete distributions of the primary pandemic model output—the likely number of fatalities—under different scenarios. Like catastrophe models, the pandemic models include random variables that must be characterized using incomplete and imperfect data combined with scientific expertise and assumptions. One of the most important variables is the transmission rate, R0, which is based on assumptions around the rate at which an infectious person infects a susceptible person and how long a person remains infectious. If, for example, an infectious
person infects one susceptible person every five days and is infectious for 11 days, the R0 is 2.2. Scientists first used what is known about previous virus outbreaks along with early data from Wuhan, China, to estimate the R0 for COVID-19. Expected values were generally in the range of 2.2 to 2.4, but given the small sample size, the 90 percent confidence interval was estimated to be 1.4 to 3.8. This is a wide range for such an important variable; a lower R0 indicates less mitigation is necessary to control the virus, and a higher R0 suggests extreme measures are in order. Along with the transmission rate, the severity of the virus in terms of how many infected people will become sick enough to require hospitalization is estimated by the models. The objective of social distancing is to slow the spread of the virus so that medical facilities don’t become overwhelmed, and medical staff are able to treat all of those who are seriously ill—i.e., to “flatten the curve.” Columbia University predicted in late March that New York City alone would require 136,000 hospital beds when the virus peaked. The University of Washington model predicted 73,000 for New York state. When COVID-19 peaked in New York on April 12, the highest daily number of hospitalizations statewide stood at 18,825.
What would be more useful than point estimates is the ability to test, against the model assumptions, various mitigation steps such as school closures, business closures, home quarantine and social distancing measures along with combinations of these measures to see how the probability distribution of fatalities changes. COVID-19 has shown that in the early phases of an outbreak there are many unknowns and a high degree of uncertainty around the pandemic model variables. The probability distributions of likely hospitalizations and deaths start out wide and flat, and point estimate predictions from the models will almost certainly be wrong. What would be more useful than point estimates is the ability to test, against the model assumptions, various mitigation steps such as school closures, business closures, home quarantine and social distancing measures along with combinations of these measures to see how the probability distribution of fatalities changes. This would give policymakers a more informative and transparent framework for decision-making.
Incorporating New Data as It Develops
Catastrophe models typically are updated every few years. Major landfalling
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hurricanes and earthquakes are relatively rare, but when they do occur, they produce a lot of valuable data that is then used to fine-tune and improve the model assumptions. During an outbreak, the pandemic model assumptions can be updated continuously with new information. As the virus spreads, data on cases, hospitalizations and deaths are collected and will shed more light on the various unknowns to give a clearer picture of how the virus will develop. For example, by early March, the data were clearly showing that COVID-19 was not an indiscriminate killer but was specifically targeting the elderly. Early estimates of the infection fatality rate (IFR)—specifying how many people who become infected will die—were around 1 percent for COVID-19, 10-times higher than normal influenza. This assumption drives the projections of deaths from the models. As data were collected, it became clear just how skewed the IFR was and that those aged 80 and above were an order of magnitude more likely to die from COVID-19 than people under 60. At the same time, the data showed mounting deaths in nursing homes and other long-term care facilities. In some states, these deaths account for over 50 percent of the total. Scientists also noted that children seemed to be less infectious than adults. Health care workers seemed to dominate the fatalities in the younger age groups, suggesting that not just being exposed but the amount of exposure to COVID-19 was an important determinant of severity. In other words, emerging data and analyses suggested the demographically weighted IFR could be significantly less than 1 percent. Evolving information can be used to fine-tune the model assumptions and to guide policy responses to the pandemic. Are the mitigation steps being targeted to the most vulnerable populations? Are the right policies in place to have the maximum impact on reducing fatalities?
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Mitigation Strategies Tailored to the Hazard
Natural catastrophes don’t impact everywhere equally. Earthquakes are much more likely in California than New York, and hurricanes are more likely to make landfall in the Gulf than the Northeast. Local building codes and construction practices reflect these differences in hazard. Similarly, COVID-19 has not impacted all areas equally. Along with varying by age and other exposure factors, the transmission and death rates appear to be strikingly different by country, city and region. Factors influencing these variables could include population density, use of public transportation, intercity travel and climate. Mitigation strategies tailored to specific locations may be more effective and sustainable over time than broad-brush approaches. Rather than lockdown or no lockdown, different levels of mitigation may be more appropriate to control the virus while helping to alleviate the other
burdens imposed by the outbreak. Death rates have not been highly correlated with the length or severity of the lockdowns, as shown in the accompanying chart. This doesn’t mean that lockdowns don’t have an impact, but perhaps only certain places require complete social lockdowns to control the transmission of the virus. For example, sparsely populated states, such as Montana, never imposed a complete lockdown, and the state has one of the lowest death rates per capita.
Beneficial Use of Random Sampling
The pandemic models use the IFR to estimate the likely deaths from an outbreak, and this assumption is critical for testing the effectiveness of mitigation strategies and informing policy decisions. But the IFR cannot be estimated accurately when the total number of infected people is unknown. Based on different scientific studies, the IFR could be as low as 0.2 or as high as 1.6 percent. A shortage of supplies has meant that
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Risk Alerts continued from page 11 only people showing severe symptoms of COVID-19 are tested, and wide-scale testing has not been possible. Scientists know the confirmed number of COVID-19 cases; they don’t know the actual number of cases, which is likely much higher. As the actual cases rise, the IFR falls, given the number of deaths. Random sampling offers a viable alternative to wide-scale testing. With just a few thousand tests and well-constructed samples, it’s possible to narrow the range of estimates for the IFR. Random sampling is a standard statistical technique. Catastrophe models use the historical data over relatively short time periods (typically about 100 years) as the sample from which to extrapolate thousands of years of potential events and the true long run distribution (exceedance probability curve) of losses. As in other sampling processes, such as political polling, a well-constructed random sample
can usually produce a relatively accurate prediction of the outcome. Stanford University and the University of Southern California did conduct such studies to determine the number of people who had already been infected with COVID-19, and both studies found that the actual cases in certain California counties were likely 50 times greater than the confirmed cases. By using samples representing a cross section of the population, scientists could determine that the true IFR is likely near the low end of the range.
The Way Forward
Every virus has its own unique personality: No two are exactly alike, and much is unknown at the start of an outbreak. Scientists must work with scarce data and past knowledge to infer values for the pandemic model variables. Projections
from the models can be sharpened as valuable data are collected and used to refine the model assumptions. Before the next pandemic, the models that will drive many governmental policy responses should be fully vetted by multidisciplinary teams, stress tested and well understood by the policymakers who will use them in emergency situations. Policymakers must understand the uncertainty in the models and how that uncertainty changes over time and impacts the effectiveness of their decisions. The COVID-19 crisis has been fraught with heated debates over lockdowns versus no lockdowns, when to start and when to end lockdowns, and whether it was better to under- or overreact. Instead of taking polarized positions, it seems wiser to respond appropriately to the next crisis by establishing a better risk management framework around the tools and models that can best inform policy decisions.
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Risk Alerts
THE RISK OF
‘Take-Home’ COVID-19
and the ‘Next Asbestos’
Executive Summary: In a catastrophic scenario assuming a second wave of COVID-19 cases later this year, losses from “take-home” COVID-19 could exceed $50 billion—and even the first wave could mean awards and settlements of $27 billion, according to Praedicat. Here, Praedicat executives explain the concept of take-home exposure, drawing parallels to take-home asbestos lawsuits, which were based on the negligence of the employers whose workers created secondary disease exposure for family members.
E
By Melissa Boudreau and Robert Reville stimates of the size of COVID-19’s impact on the insurance industry vary widely, but some have suggested that, considering both asset and liability losses, it will be the largest event in insurance history. In that sense, the coronavirus appears to be the latest candidate for the “next asbestos.” Unlike asbestos, which emerged through the U.S. legal system, early estimates for general liability losses from COVID-19 are lower than the predictions from business interruption or event cancellation lines. As an infectious disease spreading widely through the population, it seems challenging to blame infections on the actions or products of specific companies. Therefore, it may, at first glance, appear destined to only result in modest losses for general liability. A deeper review of the risk, however, suggests there are some precedents that could portend a larger loss, and
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they come precisely from asbestos. Many of the innovations in tort law, the underlying legal system driving liability risk, have come from asbestos. After several scientific studies in the 1960s found that insulation workers had elevated risk of asbestos-related diseases, the Eastern District of Texas court established in 1971 (Borel v. Fibreboard Paper Products) that insulation workers could sue the product manufacturers responsible for putting the asbestos in the product. This tort law innovation launched a major wave of asbestos litigation driving liability losses
in the 1970s. Later, numerous scientific studies found elevated rates of asbestos-related diseases among families of asbestos workers as well. Melissa Boudreau is the A study in 1978, for Vice President of Modeling instance, found that at Praedicat. family members of asbestos workers were 10-times more likely to have mesothelioma than otherwise equivalent individuals. (Source: Vianna NJ, Polan AK, “Non-occupational exposure to asbestos and malignant mesothelioma in females.” The Lancet. ) Robert Reville is the Chief Subsequently, in the Executive Officer of mid-2000s, courts began Praedicat. to award damages to spouses and children of asbestos workers. This wave of litigation, referred to as “secondary” or “take-home” exposure lawsuits, has been an important factor in the later waves of asbestos litigation. One characteristic of the take-home asbestos litigation is that the basis of the lawsuit is the negligence of the employer itself, rather than a product defect for some supplier. As such, it potentially increases the footprint of the risk outside product exposures, and therefore doesn’t just implicate the suppliers but
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Risk Alerts continued from page 13
“Given the ‘social inflation’ environment that existed as COVID-19 emerged, it is reasonable that insurers should prepare for an adverse ‘take-home COVID-19’ liability landscape while hoping for the best.” now the employers themselves. COVID-19 is not a product risk like asbestos. But it is an occupational risk, as workers in hospitals, nursing homes, “essential” retail, meat production, construction and other industries face elevated rates of transmission, magnified by stay-at-home orders that concentrate transmission within the businesses that remain open. As early as February 2020, published scientific studies from Wuhan identified one of the coronavirus’s key risk characteristics as a high degree of intrafamily and intra-household transmission. Frequently, workers who are not from vulnerable populations are exposed to COVID-19 at work; then spouses or parents are exposed at home. Unlike transmission of COVID-19 to customers or transmission in the wider community, where a specific source of exposure may be difficult to prove, takehome COVID-19 for the parent of a nursing home worker, for instance, is relatively straightforward to connect to the specific nursing home. Furthermore, virus tracking using genetic sequencing of potentially linked infections can help associate or dissociate the worker or family member’s infection from other potential sources. In this sense, take-home exposure for COVID19 is a significant phenomenon supported by science, forensics and legal precedent, and therefore may become a significant liability risk as well. Praedicat has developed scenarios for “take-home” COVID-19 liability risk. We estimate that approximately 13 percent of COVID-19 deaths are family members of workers who acquired their illness at work.
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In a scenario where the ultimate size of the U.S. pandemic is 150,000 deaths, a level predicted by the Institute for Health Metrics and Evaluation at the time of this writing, the scenarios suggest a range of awards and settlements between $11.4 billion and $27.4 billion, depending on the degree to which courts accept this cause of action. In a catastrophic scenario where a second wave of cases occurs in the fall and winter and the ultimate size of the pandemic in the United States is 300,000 deaths, the losses could exceed $50 billion. These losses would be broadly spread across industries ranging from healthcare to retail and would involve companies of all sizes. If these losses are covered by insurance, general liability alone will elevate COVID-19 to “next asbestos” levels. Take-home asbestos liability has not been uniformly accepted by U.S. courts. Indeed, New York State, which has seen the largest number of COVID-19 deaths, rejected take-home asbestos liability. Other states with large numbers of cases, including Washington, California, New Jersey and Louisiana, have accepted it. We do not know if take-home COVID-19 will be interpreted the same way as takehome asbestos. Even if the cause of action is accepted, the question of coverage on general liability is unclear, as there may be infectious disease exclusions or the pollution exclusion may apply. There may even be liability protections or alternative compensation mechanisms enacted in various states to assist the recovery from COVID-19’s economic impact. Nonetheless, given the “social inflation”
Risks and Non-Risks
It’s a daunting task to comb through scientific and medical literature to identify emerging potential risks that could ultimately drive up liability insurance claims while separating out the risk myths—popular theories of potential liability, which are actually risk myths that are less likely to hold up in court. Praedicat, a Los Angeles-based InsurTech analytics firm, takes on the challenge, using algorithms that scan more than 30 million scientific journal articles—a number that grows every day. “Using machine learning and artificial intelligence, we are rapidly refreshing our data to capture new articles and identify new risks,” the company says on its website. The accompanying article is part of a series of regular articles that Praedicat’s people have authored expressly for Carrier Management, alerting the casualty insurance community to growing areas of concern and to areas where potentially insurable risks lie beneath hyped theories linking products to human harm.
environment that existed as COVID-19 emerged, it is reasonable that insurers should prepare for an adverse “take-home COVID-19” liability landscape while hoping for the best.
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Risk Alerts
8 EMERGING RISKS TO WATCH Pandemic and Privacy Exposures By Kimberly Tallon Even the most vigilant insurers and reinsurers scanning the risk landscape for potential future liability problems are likely to fall into landmines. What insurance risks of the immediate or distant future are being overlooked now? Carrier Management offers a continuing look at some partially hidden risks with a regular feature—CM Risk Alerts, compiled by Assistant Editor Kimberly Tallon from a subjective list assembled by the entire CM team. Our aim is to offer short takes—flagging and summarizing items that may not yet have surfaced in property/casualty C-suites or boardrooms, on insurance conference agendas or in the mainstream press but may well have insurance implications. This installment focuses on the impacts of climate change, the pandemic and other health risks.
By Kimberly Tallon 1. Climate change causing more extreme rainstorms.
If the current rate of global warming continues, North America could see 100year rainstorms as often as every two-anda-half years by 2100, says a new study published in the Proceedings of the National Academy of Sciences. “We’re finding that extreme precipitation has increased over North America, and we’re finding that’s consistent with what the models are showing about the influence of humancaused warming. We have very high confidence of extreme precipitation in the future,” said study co-author Megan Kirchmeier-Young, a climate scientist with Environment Canada. At the current level of warming caused by greenhouse gases—about 1.8 degrees Fahrenheit above the pre-industrial average—extreme rainstorms that in the
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past happened once every 20 years will occur every five years, according to the study. If the current rate of warming continues, the Earth will heat up 5.4 degrees by 2100. Then, 20-, 50- and 100-year extreme rainstorms could happen every one-and-ahalf to two-and-a-half years, the researchers concluded. The risks will continue to increase as the atmosphere warms, said David R. Easterling, a climate extremes researcher and director of the U.S. National Climate Assessment. He warned that most current infrastructure, such as dams and bridges, was designed based on rainfall values from the mid- to late-20th century and was not built to withstand the more frequent extreme rains identified by the new research.
Source: “New Study Shows Global Warming Intensifying Extreme Rainstorms Over North America,” InsideClimate News, June 2, 2020
2. Vacated buildings at risk for Legionnaire’s.
Businesses need to brace themselves for a new potential risk now that the world is beginning to reopen after months of pandemic-related lockdown: Legionnaires’ disease. Any commercial facility vacated or underutilized for more than three weeks is at risk for a Legionnaires’ outbreak unless the water pipes are properly flushed and otherwise sanitized, public health experts warn. Businesses that don’t take the proper precautions before having their staff return to the workplace could find themselves facing a wave of workers compensation claims if an outbreak occurs among employees. Legionnaires’ disease infects people when legionella bacteria is disseminated into the air as an aerosol from water sources, such as hot tubs, showerheads, fountains and industrial water cooling
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Risk Alerts continued from page 15 systems. Victims tend to display the same symptoms as coronavirus patients, including cough, chills and fever, making misdiagnosis a possibility.
Source: “Buildings closed by coronavirus face another risk: Legionnaires’ disease,” Reuters, April 24, 2020 3. Hurricanes are getting stronger.
Hurricanes have grown stronger over the last four decades—and climate change is likely to blame, says a new study from the National Oceanic and Atmospheric Administration and the Cooperative Institute for Meteorological Satellite Studies. Scientists looked at global hurricane satellite imagery taken from 1979-2017, using techniques like infrared temperature measurements from geostationary satellites to estimate hurricane intensity. Over the study period, about 225,000 intensity estimates were available for about 4,000 individual tropical cyclones worldwide. The study found that the likelihood of a storm becoming a major tropical cyclone— Category 3-5 on the Saffir-Simpson scale, with wind speeds 111 mph or higher— increased approximately 8 percent per decade. Regionally, the North Atlantic, along the U.S. eastern seaboard, showed the greatest changes, with the probability of a hurricane becoming major increasing a whopping 49 percent per decade.
Source: “Climate Change Making Hurricanes
Stronger: Study,” Carrier Management, May 22, 2020; University of Wisconsin-Madison 4. Diesel exhaust linked to Parkinson’s.
A new study from UCLA has found evidence of a link between diesel exhaust and Parkinson’s disease. Findings of the study, published in the journal Toxicological Sciences, show that chemicals in diesel exhaust can trigger the toxic buildup in the brain of a protein called alpha-synuclein, commonly seen in people with Parkinson’s. Previous studies have shown a connection between living in areas with higher levels of traffic-related air pollution and Parkinson’s, but scientists couldn’t be certain “whether air pollution is actually the thing that’s causing the effect or whether it’s something else in urban environments,” said Jeff Bronstein, a professor of neurology and director of the UCLA Movement Disorders Program. The new study, in which researchers used zebrafish and cultured human cells, showed that exposure to certain chemicals found in diesel exhaust resulted in a change in behavior and caused neurons to die off due to disruption of autophagy—the process of breaking down old or damaged proteins to make room for the new ones needed for healthy communication between neurons. In Parkinson’s, alpha-synuclein proteins that would normally be disposed of pile up in toxic clumps in and around
neurons, eventually killing them and interfering with the proper functioning of the brain, which can result in symptoms such as tremors and muscle rigidity.
Source: UCLA 5. Sea-level rise will redefine the coastline.
By 2100, city streets in some coastal U.S. cities could experience flooding every day, making urban waterfronts practically uninhabitable, warns a recent study published in the journal Scientific Reports. If sea levels continue to rise as expected, extreme flooding events in some coastal areas of the country could double every five years, according to researchers from the U.S. Geological Survey, the University of Illinois at Chicago and the University of Hawaii. The scientists predict that today’s “oncein-a-lifetime” extreme water levels, which are currently reached every 50 years, may be reached every year in 70 percent of U.S. coastal regions by 2050, and every day at high tide for 90 percent of the U.S. coastline by 2100, based on wellestablished sea-level projections. “For most locations around the U.S., we found that 5-10 centimeters [around 2-4 inches] of sea-level rise can double the chances of flooding. Combining this with sea-level projections over time, it appears that the chances of extreme flooding in most locations around the U.S. will double every five to 10 years,” the study’s authors told Newsweek. According to the researchers, cities in low-latitude, low-elevation regions will be the most vulnerable, such as Honolulu, New Orleans and San Francisco. They added that some cities along the East Coast—such as Miami, Charleston and Atlantic City—were “highly vulnerable.”
Source: “Some Coastal U.S. Cities Could Experience Flooding Every Day by 2100 If Sea Levels Rise as Expected, Scientists Say,” Newsweek, April 17, 2020 6. Rats turning more aggressive during pandemic lockdown.
Restaurant closures have made rats more
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aggressive in their hunt for food, according to a warning from the Centers for Disease Control and Prevention. Rats usually feast on scraps from restaurant trash bins overflowing with leftovers, but those businesses are closed or limited to takeout and delivery thanks to stay-at-home restrictions across the country. As a result, there have been increased reports of cannibalism among rats, and they’ve been moving to residential areas in search of food. While the biggest worry comes from rodent-borne disease, experts warn that rats have also been known to devour cars. They burrow into engine compartments and gnaw at wires, insulation and even tires—which can cost a fortune to fix and has even been known to cause fires. The CDC warning includes a list of guidelines home and business owners can follow to keep rats away from their property.
Source: “Rats are getting aggressive hunting for food amid restaurant closures, CDC warns,” Washington Post, May 23, 2020 7. Can aging U.S. dams withstand more frequent extreme weather events?
The collapse of two Michigan dams in May following heavy rainfall has triggered concern that aging dam infrastructure in the U.S. may not be able to handle the increased precipitation and storms associated with climate change. The dam failures caused mass flooding that destroyed 150 houses, led to the evacuation of thousands of people and cost more than $200 million in damage. “A lot of the country’s infrastructure systems were built during a time when these kind of weather events were considered rare and didn’t present a significant threat,” Hiba Baroud, a professor of civil and environmental engineering at Vanderbilt University, told CNBC.com. “These dams are aging and need to be maintained, upgraded and in the most extreme cases, the entire design must be revisited.” The 91,000 dams in the U.S. earned a “D” for safety in a 2017 report from the
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American Society of Civil Engineers. The ASCE estimated the cost of fixing the dams whose failure would threaten lives at roughly $45 billion, and the cost of fixing all aging dams at over $64 billion. Back in November 2019, The Associated Press announced that its more than twoyear investigation had found scores of dams nationwide in hazardous condition. AP said its review of federal data and reports obtained under state open records laws identified 1,688 high-hazard dams rated in poor or unsatisfactory condition as of 2018 in 44 states and Puerto Rico. The actual number is almost certainly higher, as some states declined to provide ratings for their dams, claiming exemptions to public record requests. Others haven’t rated all their dams due to lack of funding, staffing or authority. AP examined inspection reports for hundreds of high-hazard dams in poor or unsatisfactory condition. Those reports cited a variety of problems: leaks that can indicate a dam is failing internally; unrepaired erosion from past instances of overtopping; holes from burrowing
animals; tree growth that can destabilize earthen dams; and spillways too small to handle a large flood. Some dams were so overgrown with vegetation that they couldn’t be fully inspected.
Sources: “More dams will collapse as aging infrastructure can’t keep up with climate change,” CNBC.com, May 21, 2020; “AP: At least 1,680 dams across the US pose potential risk,” The Associated Press, Nov. 11, 2019 8. FBI warns: Some Zoom meeting hacks are violent crimes.
Your Zoom meeting could be violated by images of child pornography, says the FBI in a new warning. The FBI said it has received more than 195 reports of incidents throughout the United States and in other countries in which a Zoom participant was able to broadcast a video depicting child sexual abuse material. The FBI said it considers this activity to be a violent crime that re-victimizes the depicted child with every viewing. Anyone who inadvertently sees the material during a virtual event is potentially a victim as well, the warning advises. The FBI said it is seeking the public’s assistance to identify those responsible for these crimes. If you administered, hosted or participated in a Zoom meeting that was hacked with this material, contact the FBI before deleting or destroying any computer logs or recordings of the meeting.
Source: FBI.gov warning, May 20, 2020
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Claims 2020
Nuclear Verdicts: What Property/Casualty Carriers Need to Know
Executive Summary: The impact of the coronavirus on the court system is yet to be determined, but in the days before many states started postponing jury trials, Tyson and Mendes Partner Robert Tyson Jr. reflected on recent trends in litigation, the factors fueling “nuclear verdicts” and what P/C insurers could do to stem the tide. A key step in the new playbook: Drop the “this is how it’s always been done” mentality and the pattern of not accepting responsibility.
T
By Robert F. Tyson Jr.
Robert F. Tyson Jr. is a trial lawyer and the Strategic Managing Partner of Tyson & Mendes LLP. He is the author of “Nuclear Verdicts: Defending Justice for All,” a new playbook for the defense industry. Reach him at rtyson@ tysonmendes.com.
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o mitigate the explosion of nuclear jury verdicts—which topped billions of dollars last year—insurance companies need to take a stand to meaningfully impact the U.S. tort system. The most effective way to do that is through your defense counsel. It really is as simple as asking your defense counsel to focus on preventing nuclear verdicts. You just need to give them the tools and incentives to do it.
A Brief History
What has changed in the last 10 years to trigger such excessive jury awards? In 2009, two big things happened. First, a book titled “The Reptile Theory” was published. The book describes a tactic in
which plaintiffs’ attorneys spark the “fight or flight” mentality among jurors so they decide cases based on emotions rather than the facts. The book changed the way many plaintiffs lawyers try cases and taught them not how to garner sympathy from a jury but how to get them angry. While the plaintiffs bar was revolutionizing the way they try cases, other global circumstances were fueling change. The Great Recession of 2009 hit the world’s largest financial institutions hard, including insurance companies. What did insurance carriers do in response? What any prudent business would do: focused on cutting expenses. In addition to layoffs and office closures, there was a movement to reduce defense costs. As a result, defense firms have dramatically changed the way we do business. Defense firms have implemented new billing guidelines, electronic billing procedures, audits, appeals, budgets, reverse rate auctions, rate freezes, metrics, case cycle times, and a whole host of litigation management initiatives and cost savings. None of these were the ideas of defense lawyers or something we learned in law school. No, the insurance industry requested outside counsel focus on defense costs, and we listened. Yet, while the defense bar focused on
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reducing defense costs, plaintiffs lawyers have been revolutionizing the way they try cases—achieving nuclear verdicts at an alarming pace. Now the insurance industry must act.
Effectuating Change
Insurance companies are not to blame for nuclear verdicts, but they do have the power to effectuate change. If you want to focus on indemnity—specifically, runaway jury verdicts and social inflation— then do it. Your defense firms will listen and the tide will change on nuclear verdicts. But what can you do? Insurance professionals across the country are scratching their heads at the almost daily eyepopping jury verdicts. There are many things contributing to the explosion in nuclear verdicts that insurance companies cannot control, including social inflation, litigation funding, plaintiff attorney advertising, lack of tort reform, anticorporate sentiment, generational issues and many other macro issues. Thankfully, nuclear verdicts can be stopped at the trial level, and insurance
What will make a jury angry is not that your insured’s truck went through a red light. It will be that your insured failed to train the driver a year earlier on the dangers of going through red lights. Or that your insured’s employee handbook did not explain the dangers of going through a red light.
This new defense approach is highlighted in Tyson’s new book, “Nuclear Verdicts: Defending Justice for All,” a detailed playbook for avoiding nuclear verdicts and teaching the defense how to even the playing field at trial.
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carriers can stop them sooner rather than later. You have the power to bring about change through education and compensation.
Education
Everyone, including in-house and outside counsel, as well as claims professionals, must be educated on how to avoid nuclear verdicts. They must understand what causes jurors to award runaway verdicts, and they must learn how to prevent them. Just like there is a pattern in most nuclear verdicts, there is a formula for preventing them. Yes, there is a series of methods that must be applied in defending every single jury trial to avoid
nuclear verdicts. The playbook for a new defense approach is clear: Figure out what is making the jury angry and then defuse that anger. Sounds simple, right? Unfortunately, it is not. The defense industry has been constructed around a legal premise that we do not have the burden of proof. And if we do not have to prove anything, and we fight everything, we might just get a defense verdict. This is the wrong strategy. Why? The plaintiffs bar has created an approach to trying cases that assumes the defense will do the same thing it always
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Claims 2020 continued from page 19 has: fight everything, accept responsibility for nothing, and never talk about the toughest parts of their case, including money. There is comfort in this approach for the defense industry. This is how it has always been done. But the plaintiffs bar is onto you. Keep using the same approach at your own peril. What fuels a jury’s anger? This is key. Very often what will make a jury angry has nothing to do with the subject of the lawsuit. It will not be about if your insured’s truck went through a red light, for instance. It will be that your insured failed to train the driver a year earlier on the dangers of going through red lights. Or that your insured’s employee handbook did not explain the dangers of going through a red light. Or that your insured’s background search did not detect that your driver had gone through a red light once before 10 years ago. All of these things trigger a jury’s anger and have nothing to do with whether the light was red or green. Ask your claims professionals and counsel what will get the jury angry. If they cannot answer this question, you should be concerned.
Compensation
Plaintiffs attorneys claim to be fighting for justice. Yet, if they really want justice for all—and not just their clients and themselves—why aren’t they offended by clearly unjust awards of up to $100 million or more? They are not disturbed by this because of their own payday. The bigger the jury verdict, the bigger their paycheck. Plaintiffs lawyers are paid on a contingency of the verdict, typically 40-50 percent of the award. Plaintiffs lawyers have a clear and compelling financial reason to win. While a defense counsel does not have a financial incentive to win, there are other motivations—pride, hope of additional work, job satisfaction, etc. The lack of direct financial compensation for winning brings to mind an old adage accepted as truth in the defense industry: “Isn’t it great that win or lose, your clients stick by you?” If you want to change the behavior of
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your defense counsel, why not incentivize them? If you want them to win big jury trials, why not pay them more for winning a $50 million brain injury jury trial than for preparing a litigation budget to comply with your litigation management guidelines? Consider a success fee or a contingency fee—or both—for a big trial win. If you want your defense counsel to focus on indemnity, why not financially incentivize them to do so? You have the power to control how your defense counsel spends their time and resources. If anything has been proven in the last 10 years, we listen to you. And I now have the metrics to prove it. There are also some very specific things that can be done right now in every jury trial across America.
Take Responsibility
Make sure you and your defense counsel are showing the jury you care. That’s right, to defuse juror anger, you must show the jury you care for the plaintiff. How do you show you care? Accept responsibility in every case. This may be anathema to many insurance executives and defense lawyers, but it is always wise to accept responsibility for something. This does not mean admitting full liability, or even any liability. For example, the defense can accept responsibility for employee training practices, following traffic laws or putting a safe product into the commerce stream. While the type of responsibility will vary depending on the facts in play, some semblance of this approach must be implemented in every trial. When done properly, accepting responsibility for
something makes the defense look like the most reasonable party in the room and defuses the type of anger that results in excessive jury verdicts.
Give a Number
Insurance companies and defense lawyers are reluctant to provide the jury with a defense damages number, especially when fighting liability. Don’t be. Remember that plaintiffs lawyers have changed the way they are trying lawsuits. When I was first trying lawsuits 30 years ago, a plaintiffs attorney never gave the jury a number. The common belief was it would be off-putting to a jury. Today, plaintiffs counsel do the exact opposite. They always give a number, employing the psychology of priming and recency. Your defense counsel must use this same psychology and give the jury a defense number in every single jury trial. And a number can be presented while still seeking a defense verdict. In fact, there is a law review study that found a jury is more likely to give a defense verdict when the defense gives a number. But if the jury does find the defendant liable, having provided them with a reasonable defense figure can significantly reduce the ultimate jury award.
It’s Time to Act
Nuclear verdicts are real, and they are increasing. This trend is a major problem for corporate America, including insurance companies. This very real issue is not going away anytime soon—unless you do something about it. The good news is that insurance companies have the power and ability to stop nuclear verdicts. It will take time, but through education and incentivizing defense counsel, nuclear jury verdicts can be prevented.
Claims 2020
Is COVID
Physical Damage? Plaintiffs Relying on Bacteria, Ammonia and Cat Urine Rulings Executive Summary: Rulings involving bacteria, ammonia and cat urine give plaintiffs hope with COVID-19 claims. But for each court case that plaintiff attorneys site to support a broad interpretation of “physical loss or damage,” defense attorneys can point to another that cautions against an overbroad interpretation. Claims Journal Editor Jim Sams provides a rundown of some relevant cases.
I
By Jim Sams n 1963, congregants noticed a strange odor in the basement of the First Presbyterian Church in Littleton, Colo. Some suspected a gas leak or maybe spilled stationary ink. Others thought the smell came from a decaying rodent. The Littleton Fire Department investigated and ordered the church evacuated because gasoline had permeated the ground underneath. A leaking tank from a gasoline station across the street was suspected. Western Fire Insurance Co. denied the church’s claim under an “all-risk” property insurance policy, arguing there had been no direct physical loss. A jury, however, found that the insurer must reimburse the church $21,404.83 for the cost of cleanup. The Colorado Supreme Court’s decision to uphold that verdict spawned similar
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court opinions across the country that plaintiffs attorneys hope will support them in lawsuits against insurers seeking coverage for lost business income due to coronavirus shutdown orders. Those claims cannot succeed unless judges are persuaded that potential contamination by a virus amounts to a “physical loss” or, depending on the policy, a “direct physical loss.” Scott G. Johnson, chair of the insurance group for the Robins Kaplan law firm in Minneapolis, detailed the evolution of the meaning of “physical loss” in an article published in 2019 by the Tort Trial & Insurance Practice Law Journal. He said until the 1963 ruling in Western Fire v. First Presbyterian Church, state and federal courts had always decided that a physical loss means “a distinct, demonstrable physical alteration or change” to a property. Johnson said he has received more than a dozen emails about his article since the pandemic began—including requests from policyholders to represent them in coverage disputes. He refused because he represents insurers. He said he also disagrees with Western Fire and its progeny, but he acknowledges that some rulings have given plaintiffs lawyers room for argument. “Western Fire started this whole line of cases that went far afield,” he said. “This shows that the courts, if they want to find for the insureds, will find a rationale for it.”
Odors and Vapors
Plaintiffs attorneys often cite the 3rd Circuit Court of Appeals’ 2005 decision in
Motorists Mutual Insurance Co. v. Hardinger
to argue for coverage in coronavirus business interruption claims. David and Chrystal Hardinger had to abandon a house they had purchased just a week-and-a-half earlier in Berks County, Pa., because they and their children fell ill with skin infections and respiratory troubles. They filed a property insurance claim. Motorists tested the well and discovered it was infected with e. coli bacteria. The carrier denied the claim, saying there was no physical loss, the policy excluded any loss caused by pollutants, and the well was contaminated before the policy incepted. The district court granted summary judgment in favor of the carrier, agreeing there was no physical loss to the property. But on appeal, the 3rd Circuit remanded that ruling back to the trial court with instructions to consider its holding in another case that found the loss of use of a property can amount to a physical loss under Pennsylvania law. The 3rd Circuit noted its 2002 decision in Port Authority of
New York and New Jersey v. Affiliated FM Insurance Co., where it found that
contamination from asbestos had made a structure unusable—a physical loss.
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Claims 2020 continued from page 21 “Applying Port Authority’s standard here, we believe there is a genuine issue of fact whether the functionality of the Hardingers’ property was nearly eliminated or destroyed, or whether their property was made useless or uninhabitable,” the majority opinion said. In 2014, the federal district court in New Jersey expanded on that decision in
Gregory Packaging, Inc. v. Travelers Property and Casualty Co. of America. The court
found that an unsafe amount of ammonia from a refrigeration system had caused a direct physical loss to a property covered by the company’s insurance policy. The 3rd Circuit sets precedent only for federal courts in Delaware, New Jersey, Pennsylvania and the Virgin Islands. But lower-level federal district courts and state courts across the country have similarly expanded the concept of physical loss into the realm of odors and vapors—for example, the New Hampshire Supreme Court found that cat urine odor from a neighbor’s condominium constituted a physical loss. Johnson argues in his Law Journal article that such interpretations have rendered the word “physical” meaningless. “These courts have found coverage in the absence of a distinct, demonstrable physical alteration of the property where the insured property has become uninhabitable or where a property’s function or reliability has been impaired,” he wrote.
Attaches to Surfaces
Courts aren’t obligated to find that words mean what insurers want them to mean. And plaintiffs attorneys say their best argument that coronavirus closures cause physical losses is the fact that insurers commonly
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exclude from coverage losses caused by viruses and other micro-organisms. The Insurance Services Office released new standard policy forms in 2006 that exclude coverage for any loss caused by
“Courts have found coverage in the absence of a distinct, demonstrable physical alteration of the property where the insured property has become uninhabitable or where a property’s function or reliability has been impaired.” “virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.” Attorneys who represent businesses that purchased policies without that exclusion argue their clients paid extra for the coverage. Chris O’Malley, a Chicago attorney representing Big Onion Tavern and other policyholders in lawsuits against insurers, said courts generally assume no word in a policy is superfluous. The corollary is that the absence of words that are included in the industry’s standard policy forms also has meaning. “It’s evidence they had this language at their disposal,” he said. “They could have chosen to
exclude it, and they chose not to.” That begs the question of whether there actually is coronavirus on a property, as opposed to merely a government order issued as a precaution. Local governments may have been giving plaintiffs attorneys some help with making an argument that the coronavirus is more than a figment. Emergency orders issued by many cities and counties declare the novel coronavirus causes property damage. For instance, Executive Order No. 100 by New York City Mayor Bill de Blasio says the coronavirus “physically is causing property loss and damage.” Similar orders were issued by jurisdictions scattered from Los Angeles to Key West, with several citing the “propensity” of the coronavirus to transmit from person to person by attaching to surfaces. Attorneys Edward M. Koch and Elizabeth C. Dolce, with the White and Williams law firm, said in a blog post that a preemptive closure prompted by the threat of coronavirus on a property won’t qualify as a direct physical loss or damage. Even the 3rd Circuit, when ruling in favor of the plaintiff in the Port Authority case, found that “the mere presence of asbestos or the threat of its future release” was not enough to trigger coverage, they said. For each case plaintiffs attorneys cite to support a broad interpretation of “physical loss or damage,” defense attorneys can point to another that cautions against an overbroad interpretation. In 2005, the 8th Circuit Court of Appeal ruled that loss of function alone was not direct physical loss or damage and the fact that a facility could not be used for its intended purpose did not amount to a physical loss. The case was Pentair v. American Guarantee and Liability Insurance. Pentair had claimed a contingent business interruption loss after an earthquake cut power to its factories in Taiwan, forcing it to pay extra for air freight in order to meet shipping deadlines. A divided 8th Circuit panel ruled that a power outage, without specific damage to Pentair’s factories, did not merit business interruption coverage. Jim Sams is the Editor of Claims Journal, a sister publication of Carrier Management.
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Claims 2020 Holistic Workers Comp:
Moving Beyond
the Physical Executive Summary: Mental health, work design and off-the-job conditions all affect the recovery rates of workers injured on the job, according to experts who spoke at the Workers Compensation Research Institute’s annual conference.
By Andrew G. Simpson
F
or too many workers, the effects of injuries do not end when their physical harm is healed and they get back to their jobs. What begins as a work injury too often ends up leading to deep and long-term issues, including depression and early death.
This is not news to Dr. Les Boden, professor of Environmental Medicine at Boston University’s School of Public Health. Much of Boden’s research is focused on the economic and human consequences of injuries and illnesses. “I’ve been looking at the long-term effects of workplace injuries for a number of years, and during that time, as an economist, I found out that many workers have effects on their earnings that last long past the time that they’re no longer on workers compensation,” he said, sharing his experience and research at the Workers Compensation Research Institute’s annual conference in Boston in early March. “I’ve also discovered that lots of workers who’ve had workplace injuries end up on Social Security and disability insurance—many more than the Social Security Administration thinks are there.” He has also learned that workers who suffer lost-time injuries may actually die earlier than others in similar situations. Boden’s research team began 20 years ago following 100,000 workers in New Mexico after they were injured. In terms of overall mortality, there was “a considerably higher rate of death among people who had lost-time injuries than people who only had medical-only injuries.” The study also looked at causes of death, recognizing that the opioid epidemic began during the period these workers were injured. They found there was a substantial
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Claims 2020 continued from page 23 increase among those with lost-time injuries in both drug-related deaths and suicide deaths as a percentage of all the people in those categories. A lot of the suicide deaths, particularly among women, were caused by a drug overdose. For men, the percentage wasn’t as high. Boden said that’s because men tend to kill themselves with guns. “This is an important issue,” said the professor, noting that people injured at work have an increased risk of both opioid dependence and depression, eventually leading to overdoses and suicides. Digging deeper, Boden speculated that people in pain who don’t have sick pay or fear losing their jobs if they stay out too long seek out opioids to keep pain under control. Noting that workers compensation does not always address post-injury depression issues, he also said that limited access to mental health services contributes to the deaths and suicides in those who suffer depression as a result of injury. “This is something that it’s time for all of us who are interested in occupational safety and health to take a closer look at, to prevent morbidity and mortality resulting from a workplace injury—not directly from
Involuntary Job Benefits
an injury but indirectly from the mental health consequences,” he said.
Total Health
Francis Callahan, a labor leader and educator for the building trades in Massachusetts, has seen firsthand how opioids have led to addictions and then to post-injury mental health issues for many workers. He has also seen many injured workers on pain meds under pressure to still show up on the job. Workers comp pays only 60 percent of a worker’s pay in Massachusetts. “You can make a lot more if you’re willing to take a pain medication and soldier on,” he said. There are other incentives to soldier on. Workers not working may lose pension credits and health insurance. “You lose a lot, even on workers comp, so you’re more likely to tough it out,” Callahan said. The union’s mental health program is built on education, drug testing, a strong benefit plan with an employee assistance program and peer-to-peer communication. “We call each other brother and sister in the labor union, and there really is a family aspect to that camaraderie,” said Callahan, noting that “if you’re a carpenter, you’re going to talk to a carpenter, or an
According to NIOSH, links between a job and a worker’s total health are many. Not all are good. Dr. Casey Chosewood lists situations where employers might intervene: Insecurity about wages. “If you don’t have an income, your health is likely to suffer pretty fast, if for no other reason than because of the stress that comes from not knowing if you’re going to get a paycheck next Friday,” Chosewood said. Paying shift workers better is an “immediate way” that employers can improve their health—even just another 10 to 50 cents per hour. Time poverty from holding down multiple jobs. “All of the health pursuits that you might be trying to achieve—there’s no time left over for them. No time for family or physical activity, for finding healthy meals and preparing them,” he said, adding that multiple jobs often means multiple commutes as well. Obesity. The obesity rate among long-haul truck drivers is close to 80 percent. Chosewood said it’s not just because truck driving is a sedentary job. “The stress that comes from the need to be constantly vigilant when you work is likely at play. [And] truckers smoke more and eat more to overcome the boredom and to avoid sleep.” Obesity also plagues police officers, firefighters and security guards. In addition to stress and the need for chronic vigilance, these first responders “need to go from 0 to a 100 really quickly.” In fact, he said, most firefighters die of heart attacks on the job, not during fire-related activities.
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electrician or an iron worker. It’s that camaraderie on the job.” Co-workers can reach out or a steward who sees that someone is having difficulty may ask if something is going on at home. “I’m not going to treat you. It’s going to be confidential. I’ll direct you to the right place to get you the treatment you need,” Callahan said. Mary Christiansen, senior manager of the self-insured workers compensation program at Southern California Edison, advocates taking into account the employee’s life outside of work as well as at work. Her team recognizes that when people have injuries, there may be things happening in their lives that prevent them from recovering as quickly as they might. These include depression, comorbidities, financial problems or family problems. “We stepped back and we said, ‘What does the company have available to help these injured peers recover?’” The Edison program includes but goes beyond the employee assistance program to involve those handling wellness, benefits, financial services, even payroll. One result is a fact sheet with “hotlines” that claims reps use to refer employees seeking help with specific issues. She said overall workers compensation costs are down in part due to this approach to the “whole” person. There has also been a positive effect on family leave costs.
Redesigning Work
The blending of work and non-workrelated issues is important, agreed Dr. Casey Chosewood, director and senior medical officer for the Total Worker Health program at the National Institute for Occupational Safety and Health. “You don’t leave all of your home issues in the parking lot and come into the office. You bring that with you. And conversely, you don’t leave all of your workplace stressors in the office. You take those home with you. So, employers have a stake in the total health of their workers,” he said. But as important as it is to address nonwork issues to help workers recover, Chosewood believes it is equally important
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to improve the quality and design of work itself. He urges employers and insurers to “think beyond safety, beyond health promotion, and start thinking more comprehensively and promptly” about all of the ways work affects health. “In general, we don’t do a good job of appreciating the risk that work plays in our lives,” said Chosewood, noting that a job can influence a worker’s health through its design, wages, stability, benefits, hours, location, training, relationships and environment. “Work is also an important way that we gain social status and gain connections to other people who can be supportive, or can be debilitating, to our health and well-being,” he added. A person’s job is related to the likelihood of having chronic diseases, including heart disease, asthma and hearing loss. Work is also related to obesity, diet, smoking, stress, depression, exercise, car accidents and even life expectancy. “We need to improve the quality of work so we counterbalance some of the inevitable harms that come from employment,” he said. (See related sidebar on “Involuntary Job Benefits.”)
Where to Start
While employers cannot get rid of all risk factors, they may be able to minimize their impact. According to NIOSH, the place to begin is with two vulnerable populations in particular: low wage workers and employees in small businesses. Most workplaces have low-wage workers. They tend to have the more hazardous jobs and thus are more likely to be injured, according to NIOSH. They often have little control over their work and are also subject to job insecurity, forced overtime and discrimination. They are at increased risk of job stress and mental health disabilities. “If you don’t have enough money to intervene in every demographic in your workplace, starting here is going to give you the biggest bang for the buck,” Chosewood said. Small businesses (under 500 employees) number about 30 million, according to Small Business Administration data from
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2018. They employ about 59 million people, or more than 47 percent of the U.S. private workforce. About one-third (33 percent) of the U.S. workforce is in businesses with fewer than 100 employees, while about 16 percent work for businesses with fewer than 20 employees. Many small businesses do not survive beyond four years, but those that last five years have less than half the annual injury rate as businesses that lasted only two years, according to NIOSH. Chosewood said small firms tend to “struggle to exist in a risky economic environment” and often lack resources for employee training, workplace safety, health initiatives and protective equipment. For insurance companies serving smaller employers, “this is an area of potential influence,” he said.
Job Contract
Low-wage and small business workers under contract also face risks. In some situations, they may not have appropriate training or the same access as full-time employees to the appropriate personal protective equipment. “Their supervisor chain is oftentimes cloudier,” he said. Furthermore, hazardous work is often outsourced, leading to a concentration of high-risk jobs for these workers. Another side effect for this type of work: “It tends to isolate; it tends to make vulnerable populations more vulnerable under certain employment conditions,” he said. In thinking about injury reduction, it’s critical to look at how the contract for
workers is written, he said. A job contract can be as powerful as the actual job when it comes to the health of low-wage and small business employees, according to Chosewood. People who don’t have secure work often face other related risks. “Here’s the secret,” he said. “Those same workers that went home with more health at the end of that day come back to work the next morning with that increased level of health.” And that, NIOSH research found, quickly translates into lower injury risks, more productivity, less absenteeism and lower healthcare spending. The NIOSH approach places top priority on eliminating conditions that threaten safety, health and well-being rather than individual health or behavioral change, said Chosewood. “You cannot overcome eight, 10, 12 hours of hazardous work with a ‘lunch and learn’ on diabetes. It’s not going to happen,” he quipped. “You have to think more upstream. You have to think about organization-level interventions, policy-level interventions.” NIOSH is preparing a new tool that measures worker well-being and will help employers identify intervention areas. Information on NIOSH’s Total Worker Health Program is available at https://www.
cdc.gov/niosh/twh/default.html. Andrew G. Simpson is the Chief Content Officer of Wells Media.
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Leadership In Insurance
‘My Airplane’ Don’t Let Fear Keep You From Taking Action
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Executive Summary: “Over the course of any given day, we can encounter an inflection point, a situation that suggests we need to take action. But often we don’t see it. Or we might see it, but we don’t have the courage to act.” Guest Editor Don Bailey recounts his own path to finding courage.
By Don Bailey Carrier Management Guest Editor Partner, Bristlecone Partners
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ertainty is scarce right now. When we lack certainty, we lack calm and peace. Our lives feel out of control. It’s daunting to capture calm in the midst of chaos. But when we seize control in times of uncertainty, we can change everything. One man’s decision to act inspired me to take control of my life. Fulfillment comes to those who have the courage to seize control. I was sitting in my office in lower Manhattan on a cold, gray winter day 11 years ago when I heard an unusual commotion. The date was Jan. 15, 2009. You may not recall the date’s significance, but I’ll bet you remember what happened. My office, near Battery Park City, looked right over the Hudson River, across to New Jersey. On that overcast day, with the river so close, I could almost feel its icy embrace. Working across the street from the World Trade Center site and having
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lived through my own 9/11 experience, I’d become sensitive to unusual noises and things flying too low in the sky. Glancing out the window, I saw what appeared to be an airplane sitting in the middle of the Hudson. It was US Airways Flight 1549, better known as the “Miracle on the Hudson.” The flight took off from LaGuardia Airport at 3:25 p.m. Only two minutes later, at about 2,700 feet, the pilots heard a thudding rat-a-tat and the cockpit windscreen turned brown. The engines had encountered an Alfred Hitchcock-sized flock of birds. Both engines were damaged, and passengers could see flames shooting from them. Air Traffic Control instructed Flight 1549 to circle back to LaGuardia for landing, but it was too late for that. The pilots knew they’d never make it, so they decided to land the plane in the safest available place: the Hudson River. Soon after catching a glimpse of this mind-boggling sight, I put on my coat to brace against the January cold and headed toward the river. I stood on its edge to watch one of the most amazing scenes I’ll ever behold. There were people standing on the wings, almost calmly waiting to be rescued. Incredibly, everyone was saved. My mind buzzed. I couldn’t help wanting to know everything about the crazy tableau in front of my eyes. Why did they make an emergency landing? How did the plane land without breaking apart? What went on in the cockpit as potential disaster loomed? Over the following days and weeks, we all learned. And, in the process, I learned how to take control of my life. There were two men flying the aircraft. The pilot, Captain Chesley “Sully” Sullenberger, a former fighter pilot, also happened to be a flight safety expert and glider pilot. The first officer, Jeffrey Skiles, had just qualified to fly that particular plane, an Airbus 320, and was on the last leg of his first assignment at the controls. As disaster struck that afternoon, it was he—not Sully—who was flying the plane. In my almost obsessive search for more information, I found the unabridged cockpit transcript for Flight 1549. Cloaked
in the technical jargon of pilots and air traffic controllers hides an amazing story. First Officer Skiles was at the controls as a skein of Canada geese bombarded the plane. Sullenberger quickly assessed the situation, and with both engines disabled and fire licking the wings, he instinctively said, “My airplane.” When the first officer heard those words, his training compelled him to relinquish the plane to the captain. Sully was now personally in charge. Relying on training for a task he had mentally prepared for but had never physically done, Sully executed a water landing outside of New York City. Those two words saved 150 lives. I’m not being cavalier. With all due respect to
“I have zero data to back this up, but I am absolutely positive that people who regularly take action are more successful personally and professionally than those who don’t.” Skiles, I am 100 percent confident that the passengers and crew of Flight 1549 would have experienced a very different fate had Sully not made the decision to take control. Let’s look closer at that moment. In the midst of dangerous, disorienting, adverse events, Sully’s training and instinct told him that he needed to step up and take charge of a crashing plane. He knew that he was the only one on that plane who had a chance of saving all on board, so he made a decision. Don’t miss that point: He made a decision, and then he acted on it despite desperate circumstances. Often, the most difficult thing in life is having courage to make a decision at a critical inflection moment. I’m not referring to the mundane, binary decisions we make every day (oatmeal or eggs?). I’m talking about those that potentially change our path whether we know it or not.
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Leadership In Insurance continued from page 27 Over the course of any given day, we can encounter an inflection point, a situation that suggests we need to take action. But often we don’t see it. Or we might see it, but we don’t have the courage to act. Why? Inaction somehow seems safer than action because it’s known. Acting has risks associated with it. Acting brings accountability, maybe even failure. Failure to act usually will not mean that a plane full of people crashes in a major metropolitan area. But critical inflection points are all the same in that they require action within a given time frame and are then gone forever. The consequences of our choice to act or not, to take accountability or not, shape our future. People, in general, seem far less interested in personal accountability in risky situations than ever before. Nobody wants to be in charge of a crashing plane— or even of a plane in turbulent skies. Nobody wants to be responsible for his or her actions should things go badly. The
D
dispersion of responsibility allows everyone to point a finger when something goes wrong. That cripples us as a society. That scares me. There has been collective buy-in to the Bystander Effect: the belief that someone else will come along and fix things. But no one wants to be the fixer because they might fail. Each person who chooses to run away from responsibility diminishes us as a society; it’s one more brick removed from the foundation. And, as I said, it’s scary. I’m going to go out on a limb here. I have zero data to back this up, but I am absolutely positive that people who regularly take action are more successful personally and professionally than those who don’t. There is an old saying that smooth seas don’t make a skillful sailor. For me, it means that people who habitually take ownership and accountability—specifically in unpredictable, high-stress moments—are better equipped to handle unexpected
Meet CM’s Guest Editor Don Bailey
on Bailey, the Guest Editor for this section of Carrier Management, is a Partner with Bristlecone Partners, a Madison, N.J.-based coaching, consulting and leadership development firm, with an emphasis on leadership guided by neuroscience principles. He held executives roles in the P/C insurance industry for more than 25 years before making a career shift into coaching and consulting. • Before launching Bristlecone Partners, he served as President of Global Sales for Marsh. • Prior to that, he was President of Allstate's $5 billion B2B division and Chair of Encompass, the $1 billion mass affluent personal lines subsidiary of Allstate. He was also Chairman of Ivantage, Allstate’s $1 billion in-house brokerage operation catering to out-of-scope residential customers. • Before joining Allstate, Bailey was the North American CEO for Willis, where he created and executed a disruptive sales and distribution strategy for his 8,000 employees and engineered the $2 billion acquisition of Hilb Rogal & Hobbs. • He also worked as a Chief Underwriting Officer for Allianz Insurance Company for specialty risk lines and as a Managing Director of Aon’s Financial Services Group. • He currently serves on the Board of Advisors of ICG/SageSure and Zywave.
Reach him at don@bristleconepartners.com.
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inflection points because they know that they have at least some degree of power in any situation. “My airplane” pushed me to think about my own life. At that time, I had a big job and was making certain decisions all the time. I was working 80-90 hours a week with little time for much else—shackled by what felt like endless obligations. But after so many years of quietly complaining about my situation, it finally dawned on me that I was declaring myself a victim by claiming to be trapped. I made a decision to act. Realizing I wasn’t always the person I really wanted to be, I decided to try harder to live a life of meaning. After opening my mind up to change, I quickly realized the possibilities were endless. Sure, I could easily have fooled myself into thinking there was little I could do to change the trajectory of my life, but it became clear to me that feeling trapped compels you to act. You must do something. Make a decision—escape! Since Sully saved Flight 1549, I’ve found a new vocation that energizes me and empowers me to drive innovation, ownership and change with executives and organizations. Personally, I am now eight years into a new marriage that fulfills me, and I am working to create much closer and deeper relationships with my children. I’m talking to my kids for the first time about stuff that really matters. I’m deep into new passions, like winemaking, executive coaching and neuroscience. I commit more time to charity, reconnect with old friends, and I am simply more like the person I always knew I could be. I feel more fulfilled, more complete, and more in control of my life, success and happiness. For me, “My airplane” isn’t a story about tragedy averted but about taking action to make your life better. It’s about personal accountability. Take a good look at your life. Do you love it? If not, use the current crisis as a catalyst to decide and to act. Decide to empower yourself. Decide to come out of this better than you went in. I know it’s not easy. But nothing big and profound ever is easy. It does, however, begin with deciding to take control.
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Leadership In Insurance
Fountains and Drains
Executive Summary: There are two types of people, writes Guest Editor Don Bailey: fountains and drains. The first is filled with positivity, hope and purpose that inspires others. The second depletes others’ resources by focusing on negative thoughts and emotions.
By Don Bailey Carrier Management Guest Editor Partner, Bristlecone Partners
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ou’re either a fountain or a drain. Funny thing is, you’re not born that way. It’s a choice you make each day. How do you tell which a person is? Take an inventory of how that person makes you feel. Does he talk about himself all the time, leaving you feeling unimportant? Does she complain about everything, causing you to harbor your own
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Leadership in Insurance continued from page 29 negative thoughts or leaving you emotionally exhausted? Does he blame his failures on bad luck, or worse, everybody else? Does she make you feel worse about yourself or your own situation? If the answer is yes, you’re looking at a drain. Does he greet you with a big smile when he sees you and ask, “How are you?”—and really mean it? Is she unfailingly positive, making the future seem brighter to you? Does he look for every opportunity to help others and never take credit for anything, leaving you in awe of his selflessness and inspiring you to be the same way? Does she take charge of her own life, no matter what comes her way, believing in her heart that it’s all within her control? You’re talking to a fountain. Fountains are full of purpose, optimism and confidence. They overflow with it. They cannot prevent their joy from spilling into the lives of those around them. They fill others up. Drains deplete others’ resources by being focused on their own unquenchable chasms of doubt. At this time, our mindsets are the battleground for our well-being. And so much of our mindset is determined by those around us. Drains lead us down a dark spiral of thoughts, while fountains keep us optimistic and in the moment. Allow me to make this a little more real. One morning a few years ago my phone rang at 6:30. At that hour, it’s rarely good news. I learned that my trusted colleague, Jim, had died. At 7:00, the phone rang again. More bad news: Larry had just resigned to join a competitor, taking 15 of our employees and a number of our largest clients with him. Jim was a fountain, Larry a drain. Jim was a joy to be around and all the more powerful because of his subtle grace. Larry was just the opposite: a vortex of negativity and self-involvement that left everyone around him emotionally spent.
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Water is common to both fountains and drains. It’s an amazing thing: lifesustaining, psychologically soothing and mentally stimulating. Water is more essential than even food—we can survive only three days without it. Water also enhances life; there’s a direct correlation between clean water and economic prosperity. And, personally, nothing calms me more than sitting by a lake. Ironically, water is also a killer. Floods, tidal waves, tsunamis and storm surges regularly wreak havoc on lives and
property. Even in its most benign forms, water can envelop and suffocate. People are just like water.
The Fountain
Jim and I worked together. I was the CEO of a North American business with 4,000 employees, and Jim was a senior consultant in our largest industry practices. Major firms in the world sought Jim out for his advice on their most complex risk and insurance issues. But his reputation for technical excellence is not what people remembered most about Jim after their first meeting. It was what radiated from within him: a relentlessly positive world view married to
a genuine joy discovered in serving others, all delivered with the bedside manner of a kind and warm country doctor. Jim was a devoted husband and father who also considered his community part of his family. He was deeply involved in a number of charities. Jim was one of those guys you wanted to be around. He made you feel better about everything. I would have loved to have him as a neighbor and daily presence in my life. With Jim, it was never about him. I took it hard when I learned about Jim’s cancer. Everybody did. We all immediately rallied around him, though, as he had done for countless others. But in typical Jim style, he would have none of it—no furrowed brows, hushed tones or sad laments. He ignored the cancer ravaging his body to stay focused on what mattered most to him: everybody else. Sitting in his hospital bed, Jim spent his days figuring out how he could still help his clients and colleagues, reassuring us all along the way that he was just fine. I remember talking to him one time in the hospital. I kept asking him about him. And each time he would artfully redirect the conversation to how I, as CEO, could help one of his clients or associates. It was frustrating but also riveting. I kept thinking to myself, is this some Gary Cooper act, or is this guy really that selfless? It was no act. It’s obvious why I call Jim a fountain. He springs eternal, like hope, even in death. What’s not so obvious is that at some point in his life, Jim made the decision to be a fountain. He made a conscious decision to dedicate his energy to increasing the energy of others. He didn’t need to jockey for personal recognition. Instead, he would help. He would encourage. He would advocate for people and causes.
The Drain
Larry was a salesperson and account executive for us, what’s called a “producer” in the insurance trade. But
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that’s not what he originally was hired to do. When he first joined our firm, his job was a highly technical one with far less status and money associated with it. Larry was in luck, though. A seasoned hand and generous soul decided to take him on as a project and, Pygmalion-like, taught him everything he knew and introduced him to all of his clients. Larry was ambitious and applied himself, parlaying his mentor’s training and his own growing experience into a few promotions over the ensuing years, eventually rising to producer and team leader. Unlike Jim, the fountain, no one above him ever doubted that Larry was in it only for Larry. He had become a welltrained insurance professional, but he was still a drain. He had made the opposite decision from Jim at some point in his life. OK, so Larry resigns. Why should I care? You’re thinking good riddance, right? Well, not exactly. We taught him the ropes, handed him a roster of clients and paid him substantially. Recently, Larry had been grumbling more than usual even for him, so a competitor’s attempt to pay Larry tons of money to bring his clients and people to their firm wasn’t unexpected. What was a surprise, however, is that so many of “his people” were thinking about leaving with him. They obviously didn’t see what I and so many others did: that Larry was in it only for himself. “His people” were merely chess pieces he needed to move to help lure clients away. They didn’t know that Larry’s success to date hinged on draining resources, energy and credit from people like them. Larry’s drain-like behavior had become his lifelong default setting. Back to that morning when I got the two calls. In the insurance brokerage business, like a lot of professional services, raids like Larry’s aren’t that uncommon. That’s because the people themselves—not the company—are often considered to be the more relevant and valuable brand. I’d been here before, so I knew exactly what to do. We immediately went to the “burn the house down, shoot the dog” strategy (apologies for the harsh metaphor,
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but that’s what we called it); in other words, we fought back fast and hard. We had no choice—we were a public company and had to protect our revenues and the franchise value of our business. So, we went after Larry with every legal strategy and business tactic imaginable. We weren’t playing defense; we were playing offense. From the time I received that early morning call until 8:00 that night, we battled Larry on every front. I felt like Norman Schwarzkopf leading the forces of Desert Storm, and, like his army, mine was well trained, executed its mission impressively and secured a swift victory. After Day One we had succeeded in keeping our people and clients in the face of Larry’s insurgency. I felt really good, until many hours later when I remembered Jim. Then I felt like a heel. I had allowed my mindset to be dominated by a drain. For 13 hours, I hadn’t thought about Jim once. I had devoted all of my time and energy to dealing with Larry, the drain, when I should have been thinking about Jim. In a way, Larry won our Day One skirmish. He had managed to distract me from doing the most important thing I should have been doing that day: remembering Jim. Calling his family, honoring him, creating ways to make sure Jim’s legacy would never be forgotten—I did none of that. Instead, I watched water go down a drain.
Becoming a Fountain Is a Choice
I resolved in that moment to make better choices about where to devote my precious mindset. It’s way too easy to get caught up chasing life’s drains. For whatever insidious reason, they’re incredibly effective at drawing us in. They sap our time, energy and emotion. They make us feel bad about ourselves. Even worse, the more attention we pay to life’s drains, the more they seem to find us. I’m pretty sure we’re all guilty of focusing more on our problem employees than our stars. It’s much harder to devote your time to fountains in your life, but it’s critical. Fountains are life affirming. They energize us. Self-doubt vanishes when we
bathe our mindsets in fountains. Try this exercise. Grab a pencil and paper. Make two columns. Label one “Fountains” and the other “Drains.” List all of the important and influential people in your life in the proper column. Don’t forget yourself. Which are you? If you’re being honest with yourself and are a drain, make the decision to immediately switch teams. At the same time, make a conscious commitment to embrace the fountains in your life. Spend more time with them. Go out of your way to meet new fountains. As for the drains, if they’re important in your life, give them the gift of honesty and help them understand the negative effect they’re having on you and others. Sometimes you just can’t walk away from the drains, but for those you can do something about, figure out your best exit strategy and beat a hasty retreat. Otherwise they’ll suck the life out of you. Thanks to Jim, my mindset is set positively each day. I’m spending lots more time with the fountains in my life; I made a conscious decision to run from the drains. It required a lot of forethought, planning and careful execution, but I Don Bailey is a Partner did it. What’s more, I’ve with Bristlecone Partners, a taken my own advice and Madison, N.J.-based have discovered new coaching, consulting and fountains. As it turns out, leadership development fountains really like firm, with an emphasis on hanging out with other leadership guided by fountains! neuroscience principles. In As we all find our way addition to his coaching during this crisis, our and consulting business, mindsets will determine Bailey currently serves on how we come out of this. the Board of Advisors of The Fountain Mindset will ICG/SageSure and Zywave. serve you well. It will Bailey is the Guest Editor compel you to remain in for this section of Carrier the moment and propel Management. Read more you to emerge better than about him on page 28. you went in.
Dedicated to Jim Maloney. RIP.
Reach him at don@ bristleconepartners.com.
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Leadership in Insurance
BEWARE OF
Always and Never Executive Summary: Don’t be stuck in a binary belief system of always or never. Such extremism divides us as people, teams and organizations, writes CM Guest Editor Don Bailey. Instead, we need to find the gray area by embracing intellectual humility, seeking different perspectives and finding common ground.
By Don Bailey Carrier Management Guest Editor Partner, Bristlecone Partners
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et’s start with the normal distribution curve. Have I lost you already? The normal distribution curve, also known as a bell curve, sits on an x/y axis. It starts low, gradually rising up, hits an apex and then descends back down to the same low level where it began. The leftside tail and right-side tail are mirror images of each other. It looks like a lovely, single rolling hill. The normal distribution curve has three sections: the left tail, the fat middle and the right tail. The area under the normal distribution curve
represents probability, and the total area under the curve sums to 1. Over the years, I have come to learn quite a bit about myself and the functions of teams and organizations based upon this curious curve. Cognitively, I spent way too much of my time in the tails and not nearly enough in the middle. My beliefs about people and the world persisted in the extremes. I was always “for” something or “against” something: • He was either a great leader or a terrible leader. • The sales plan could only be terrific or
“A one-truth mindset equates to intellectual laziness. The harder effort is in the middle. The middle requires us to hold two truths—to see and embrace the gray.”
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it could be horrible. • The investment proposal was perfect or a nightmare. • The budget was completely rational or it was utterly ridiculous. I was seemingly unable to hold two truths simultaneously. Please linger on that prior sentence for a minute. Be careful of single-story narratives. When someone tells you (or you tell yourself) a story that is devoid of nuance, elegance and gray, be careful. Things are rarely always “this” or never “that.” Always and never are dangerous and generally don’t exist. This world contains a scarcity of absolute truths. Resist giving life to always and never. Unfortunately, our world has become increasingly about the tails—about desperately clinging to a single truth, to outliers. People’s belief systems have become binary. Decisions are now only a choice between two opposing options. This practice of extremism is neither helpful, nor practical. It divides us as people, teams and organizations. I am constantly being forced into being for something or completely against it. Why do I have to be with one team or the other? Isn’t there a third team? Yes, there’s the gray team! The world is gray. It’s nuanced. Elegance persists in all things. Extremism accounts for as much as 30 percent of the world. Are we better served by believing that 30 percent equals 100 percent, or is the 70 percent (or more) that we are ignoring what really matters? Reality exists in the 70 percent. Truth exists in the 70 percent. In the 70 percent, we are required to hold two truths. Let’s bring this to life. What are a few of the most polarizing “always/never” topics
today? • Climate change • Race • Guns • Politics • Millennials Depending on where you live—literally and metaphorically—you will tend to have a distinct opinion on these topics. You hold a single truth on each of these topics (e.g., guns are bad). You have a single narrative that you cling to on each subject (e.g., climate change is not real). With each of these topics, we can apply the normal distribution curve. The onetruth extremes are easy to outline. A onetruth mindset equates to intellectual laziness. The harder effort is in the middle. The middle requires us to hold two truths— to see and embrace the gray. It demands three things:
• Intellectual humility. Can you embrace
the fact that you don’t know everything? Intellectually humble people realize there is always more to the story, and they revel in learning more and getting better (the growth mindset). They seek out the gray.
• Perspective taking. Do you appreciate
that true wisdom comes from deep knowledge of a topic or concept? Your perspective alone is a limiting factor. Perspective takers are committed to escaping the echo chamber we naturally build for ourselves by seeking and learning from other points of view. Perspective takers know that more perspectives create better solutions.
• Common ground. Can you appreciate
“Always and never are dangerous and generally don’t exist. This world contains a scarcity of absolute truths.”
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that you may actually agree with the other side on certain aspects of the topic? The science of debate dictates that you find common ground with your counterparty in order to create Don Bailey is a Partner credibility for your with Bristlecone Partners, a position. Common Madison, N.J.-based ground is a precedent to coaching, consulting and change. leadership development firm, with an emphasis on The world is leadership guided by competing for our neuroscience principles. In attention. One of the addition to his coaching effective tools of and consulting business, extremism is the short Bailey currently serves on form: Twitter, LinkedIn the Board of Advisors of posts, etc. These pithy ICG/SageSure and Zywave. and emotional Bailey is the Guest Editor proclamations seize our for this section of Carrier attention and color our Management. Read more perceptions. They about him on page 28. demand a distinct black Reach him at don@ or white position. There’s bristleconepartners.com. no time for nuance and elegance in short form. The middle takes more time, requires more work and much more of an intellectual exercise. Today, we have made ourselves so busy we are unable to find the elegance in things. Our busyness blocks complexity—we simply don’t have time for anything complex, so we avoid it. I have come to appreciate things and people that are not simple. They take more time to know and understand. Complex things are often never mastered, but that journey of mastery is a precious and joyful one. Truth, reality and wisdom are embedded in complexity. Wisdom is not about knowing many things; it’s about knowing one thing deeply. We must be purposeful stewards of our attention. We must resist the natural temptation to accept simple explanations for complex things. We must not allow extremism to paint a picture of the landscape and chart our course for the future.
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Leadership in Insurance
Meaning’ ‘Finding Amid the COVID-19 Pandemic
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By Heather Althoff he COVID-19 pandemic has not only caused a tremendous amount of death, but it has also altered society’s ability to perform and experience the traditional rituals of dying, which are necessary to the grieving process. In the new COVID-19 reality, to hold a loved one who is dying or grieving is risky (and sometimes forbidden) if you have not been quarantined together. Communal
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events such as funerals, memorials and burials are limited in the number of people who are allowed to attend. New protocols require the wearing of protective gear and maintaining physical distance. Sharing a meal or having family and friends over to memorialize is unsafe. People are dying alone, and loved ones are often unable to visit or allowed only at the very end. Additionally, some of these rituals are only able to happen in a virtual
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setting. These new procedures make the grieving process more difficult. Covering topics such as survivor’s guilt, suicide, complicated relationships, unseen losses, mental illness and addiction, David Kessler’s “Finding Meaning: The Sixth Stage of Grief,” published in November 2019, is an essential resource for dealing with grief. Deaths from and during the COVID-19 pandemic will produce more cases of complicated grief, where a person’s grief inhibits them from functioning. Kessler, a student of and collaborator with Elizabeth Kubler-Ross, the psychiatrist who originated the five stages of grief—denial, anger, bargaining, depression and acceptance—argues for the addition of a sixth stage to the process: finding meaning. These stages of grief are not meant to be linear, and a person may experience multiple stages at the same time. While finding meaning is the last stage, that does not mean that once a person enters the sixth stage their grief ends. Finding meaning does, however, propel a person toward living and loving again. Kessler states that meaning can emerge in a variety of ways. He writes, “It can take many shapes, such as finding gratitude for the time they had with loved ones, or finding ways to commemorate and honor loved ones, or realizing the brevity and
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value of life and making that the springboard into some kind of major shift or change” (p. 3). Meaning can be large or small, public or private, and it can transform over time. The losses from COVID-19 are causing many of our clients to experience grief. Grief can look different depending on the person. To witness a person’s grief may be to sit in silence with them, listen to their memories or to offer support in some way. In Chapter 2, “Grief Must Be Witnessed,” Kessler states that grief is a universal experience, which should bring people together (p. 30). Last year, my mother passed away from pancreatic cancer. While I miss her terribly, I am grateful she was spared from the COVID-19 pandemic. I am so thankful that we were able to have a funeral and luncheon, and that my father could be supported by family and friends. We were able to have our grief witnessed. My father, who now lives alone, is slowly finding meaning in my mother’s death. For the two years before she passed, my mother tried to donate all of her quilting fabric, but no organizations had a need for it. After two months in quarantine, my father found a nonprofit that happily accepted the fabric for their mask-making efforts. I know this would have made my mother happy. For my father, it’s a gesture that indicates his willingness to live and love again. There is no timeline for grief, and the stages may reappear, but finding meaning will enable life and love to return.
Heather Althoff is the Managing Partner at Bristlecone Partners. She has a bachelor’s in History from Carleton College, a master’s in Library Science from Pratt Institute and a doctorate in Literary Studies from Drew University. Althoff currently serves on the Board of Advisors for the Eakins Press Foundation.
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Leadership in Insurance
No Events = No Networking? Executive Summary: Insurance is still a relationship business. Physical events were a focal point of network building opportunities in the past, and they will likely come back in new ways post-COVID. Here, CM Guest Editor Don Bailey shares ideas about future in-person events, as reimagined by someone in his network who is an executive in the event space. Bailey also offers ideas for network-building activities for insurance professionals to engage in in the meantime (without using Zoom).
By Don Bailey Carrier Management Guest Editor Partner, Bristlecone Partners
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rguably, the greatest asset I own after 30 years in the insurance industry is my network. My network was built over decades of engagements. To be clear, all of those engagements were face to face. I didn’t build any of those relationships via Zoom. More specifically, I built that network while at myriad local, regional, national and global industry events—RIMS, CIAB, ABA, along with a series of companysponsored events, incentive-based gatherings and on-location training sessions. There were meetings, dinners, cups of coffee, golf and plenty of time in conference rooms. There was a seasonality to these events. They marked the passage of time.
That network served me quite well. I was a better advocate for my clients, and I was a more effective recruiter of talent. And my network was key to my career progression. I was able to build Bristlecone Partners (my current operation) as a result of my network. It gave me courage to venture out on my own because I knew I could count on that network's support. They say insurance is a relationship business. There is no doubt. Over the course of my career, I often spoke to younger generations entering our industry about keys to a successful career. Among my top points was always the importance of building and nurturing your network. This is where I bring in COVID-19 and connect it to the event industry and your
“Raise the bar. Spend some time alone with your beliefs. What do you believe? Share those beliefs with others…People will be drawn to you.”
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ability to build a career-enhancing network. The live event industry is, in many ways, the industry epicenter of this crisis, just as New York City is the geographic epicenter. For now, there are no more in-person events. When will there be in-person events? Will there be as many? Will they be as big? Will people travel on planes to get to them? And, without these events for the foreseeable future, what does that do to an industry that was undeniably built on trusted relationships forged through a steady cadence of face-to-face engagements over many years? I reached out to Janet Dell, chief growth officer at Freeman Company. Freeman is a giant in the event industry, with 7,000-plus employees in 90-plus locations and over $3 billion in annual sales. To date, the event industry has lost in excess of one million jobs and could lose as much as $300 billion if events don't resume in 2020, according to a GoLiveTogether study based on data from the Events Industry Council and the Center for Exhibition Industry Research (CEIR). Those are staggering numbers. I also know Dell as one of my great teachers and a former colleague (when we both worked at Marsh). Dell educated me on how to modernize our legacy-obsessed industry. She helped me understand how technology could be embraced to reimagine expectations and amplify outcomes. Sales didn’t have to grow at 3 percent a year; they could grow at 10 percent with a technology-led winning strategy. And we could improve the productivity of every salesperson while also bringing more value to clients. I knew Dell would offer helpful insights on the path forward for events in the insurance industry. She initially talked to me about her ongoing effort to study rebound patterns from prior crises. She and I debated the relevance of anything that has ever happened before this crisis as instructive planning for the next few months. We dug into 9/11, Hurricane Katrina, the 2008 financial crisis, but nothing really seems to be overly useful as a point of comparison.
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Dell outlined for me a series of concentric circles. She sees events trying to become virtual, but she believes the lack of a truly effective substitute for physical presence will create a drive to a new type of in-person gathering. She sees the initial concentric circle being small. The first in-person events will be accessible by car and will not require an overnight stay in a hotel. The next circle may be a bit bigger— still accessible by car, but events may include a night or two in a hotel. You get the idea, bigger circles over time. What makes the circles bigger? People may simply get comfortable with the tradeoff—meaning the value of the in-person engagement exceeds the risk they perceive. Dell walked me through a reimagined live event where people arrive via newly established airline, lodging and dining protocols to an event that has secured cancellation insurance to protect the sponsor. This presents opportunity for the underwriting community to demonstrate its creativity and the role this industry often plays in getting business back in the game. To protect attendees, she initially envisions less attended events where enhanced protocols in distancing and testing create a level of comfort for some. Then, with cures and vaccines, we begin to see more large-scale live events. Dell makes it clear that the road back may require a few detours and take time—but it will come back in a reimagined manner. Back to networks: Does all of this suggest we wait until live events are back to build our network? Absolutely not. There is way too much at stake. While live events make network building easier, we must find new ways to build and nurture a network that will amplify the value we bring to clients and positively influence the trajectory of our careers. Here are some ideas: • Handwritten notes. There is nothing that speaks to your professionalism and thoughtfulness more than a handwritten note. I can appreciate the challenges of personal stationary and old school stamps. For me, I use an app called Felt. I use my
Apple pen to hand write personal notes to my network. The customized card, with my actual handwriting, arrives in a physical envelope with an actual stamp! It could not be any easier. Don Bailey is a Partner • Phone calls. Phone with Bristlecone Partners, a calls are the new Madison, N.J.-based handwritten notes. Make coaching, consulting and some. You don’t need an leadership development agenda, and it’s perfectly firm, with an emphasis on fine if a call lasts only five leadership guided by minutes. It’s all about a neuroscience principles. quality touch. Calls can Bailey is the Guest Editor be to current members of for this section of Carrier your network or Management. Read more prospective ones. about him on page 28. Consider calling someone Reach him at don@ that you don’t know who bristleconepartners.com. would be a valuable person to know—maybe an expert in InsurTech, data or China—and tell them why you are calling. You’ll have their attention. You could also connect via LinkedIn and send a message to get started. Be sure to ask how you could help them as well. • Author original content. When was the last time you sat down and wrote something that was all yours? I see a lot of links to articles attached to a somewhat uninteresting sentence. Raise the bar. Spend time alone with your beliefs. Share those beliefs with others. It’s not about being right or wrong; it’s about having a reasoned point of view. People will be drawn to you. You will position yourself as a valuable member of a network. Advances in technology, in concert with this crisis, can lead us to lessen the priority of network building. Don’t make that mistake. It’s critical to escape the natural echo chambers we build for ourselves. We need new perspectives. Knowledge rules going forward, and nothing will position you to learn more than a world-class network, hand built by you.
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Executive Viewpoint
TO AVOID BEING , COVID-19 VILLAINS P/C Insurers Need to ‘Overcommunicate’ Executive Summary: During and after this crisis, engaging in strategic and proactive communications will be key for the P/C insurance industry, according to crisis and reputation management consultant Richard Levick. Carriers cannot afford to sit back and wait for their clients to communicate to them, he says, calling that “the definition of bad crisis hygiene.” Here, he offers communication tips.
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By Richard Levick ne thing is almost certain in most crises: property/casualty insurance companies will be painted as villains. Consumer activists, plaintiffs lawyers and politicians will increasingly demand that insurance companies step in and “cover” situations that aren’t—and never have been—covered. It’s always happened in the aftermath of natural disasters; now it’s happening amid the COVID-19 pandemic and the economic devastation it’s inflicting. Given these stark realities—and the likelihood that it will take many months before the climate improves—how should P/C companies be communicating? P/C insurance executives have been here before. They know the indispensable role their industry must play in a crisis. And they know there’s always a Richard Levick, Esq. disconnect between what (@richardlevick) is Chairman people think is insured and and CEO of LEVICK, a what actually is. strategic communications Many of them also firm that has helped dozens recognize that P/C of insurance companies companies should be recover from crises. offering customers special policies now to protect
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them in the event of another pandemic. It would demonstrate the industry’s compassion and foresight, as well as its resolve to work on behalf of its customers’ interests. Even if clients choose not to invest in the special coverage, they’ll know that their insurers are thinking long term. For two decades, I’ve worked with a host of insurance executives, helping general counsels and communications executives anticipate and navigate all manner of disaster, from wildfires to cyber incidents to assaults on the brand and reputational harm. In my experience, industry strategists and spokespeople get it. They understand what makes P/C insurance unique—and uniquely vulnerable. Now, I’m helping them address consumer and decision-maker frustration amid the pandemic while safeguarding the industry’s reputation against a backdrop where “insurance” is not perceived to be helping as many organizations as people would like right now. Industry figures know they are and will continue to be scapegoats. It’s not realistic to think such sentiments can be eliminated. The goal should be to reduce and mitigate it. The industry’s recent initiatives— offering discounted premiums, relaxing certain billings and enhancing its charitable giving—are essential first steps. They reflect the industry’s need to do something tangible for the community in its time of need. These individual tactics, however, must be part of a larger strategy—aimed at not only easing the immediate crisis but helping to buttress the industry’s future. The key during and after this crisis is for the industry to engage in strategic and proactive communications. Insurers cannot afford to sit back and wait for their clients to communicate to them. That’s the definition of bad crisis hygiene. P/C spokespeople would do well to
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Communication Tips for Carriers Customers need to hear from carriers during the COVID-19 crisis, according to LEVICK CEO Richard Levick. He offers these tips on how to communicate. • Communicate genuinely. • Arrange as many one-on-one conversations as possible. • Other industry “ambassadors”— agents, brokers, suppliers—need to keep reaching out, too. • Help insureds focus on the long term—beyond the crisis—to offer hope. • Communicate over and over, on every available platform. • Keep it short and simple. • Offer more than regrets. • Cultivate relationships with regulators. • Encourage rating agencies to speak. • Partner with disease specialists to educate the public about future pandemics.
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remember the admonition of the late General Electric CEO Jack Welch:“In a crisis, overcommunicate.” Crisis abhors a vacuum. Carriers need to step into the void with clear, consistent and empathetic communications. Executives need to communicate genuinely. The best way to do it is to arrange as many one-on-one conversations as possible. Agents, carriers, brokers and suppliers—the industry’s “ambassadors”— need to keep reaching out to clients, prospects and stakeholders. If existing clients are forced to seek out their carriers to find out what’s going on about their business interruption insurance, they’re going to be agitated. Instead, it’s incumbent on industry ambassadors to reach out to clients with messages that extend beyond the current crisis. Remember, people and businesses aren’t sure they’re going to get through this. They’re asking existential questions about the survival of their livelihoods. By getting them to focus on the long term as well as the short, ambassadors will be getting them to think, “There’s hope.” Every available platform should be tapped, calls, emails, webinars and Zoom meetings. It’s about communicating over and over—but keeping it short and simple. Each message should recognize that customers want to hear more than regrets. Clients will want to see that the company made a sacrifice and shared some empathy. Ambassadors need to make it plain that they’re actively engaged in the broader effort to come up with real solutions. State officials, the industry’s primary regulators, understand the positive impact that insurance has on the local economy. They’re more sympathetic; they need to be carefully cultivated. They understand that the last thing the industry wants is to be forced to cover claims for which they receive no premiums, then be strapped for cash and unable to cover the big things that insurance has traditionally covered—and been compensated for. Industry ambassadors can help their elected officials without being partisan, perhaps by issuing joint industry
statements or holding joint press conferences, or serving on commissions or task forces. Ambassadors can also encourage ratings agencies to speak on the effects of requiring insurers to pay claims for which premiums weren't collected. The tangible offers carriers are making as they simultaneously advance their public policy and legal arguments form the foundation of an effective crisis management strategy. Simple as it sounds, briefly explaining the difference between insurance and government-funded stimulus efforts or bailouts is as important as it is helpful. When people and companies are desperate for help, it points them in the right direction. There’s an old saw in communications that when you’re explaining, you’re losing. But the industry has at its disposal powerful arguments, strengthened by the willingness to make sacrifices for the sake of policyholders. It’s why suspending cancellations and renewals and offering other customer discounts makes strategic sense for P/C companies. It shows you’re giving something and that your words carry more meaning because you are making a sacrifice too. P/C companies would also do well to take steps now in partnership with disease specialists to educate the public about the potential for future pandemics. Down the road, you want to be able to point back at substantial communications efforts so you can say, “Look, for years we’ve raised the alarm and encouraged our customers to buy pandemic policies.” The industry needs to challenge itself by asking, “OK, going forward, not just how do we play catch-up or how do we play whack-a-mole, but how do we go forward with a plan that is good for both our customers and the industry?” Finally, the industry needs to see this crisis as an opportunity to re-examine corporate social responsibility (CSR) and philanthropic activities. Too many CSR priorities were established years ago and may not align with a company’s current strategic needs. Look forward so you can look backward with pride.
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Executive Profile
From IT Leader to CEO: A Natural Path for Westfield’s Largent Executive Summary: “If we can provide a classic risk transfer mechanism plus other services to a commercial business that they view as valuable, that then becomes a very different kind of experience than the standard ‘insurance’ experience. That is the aspiration,” Westfield President and CEO Ed Largent told CM recently, explaining a transformation currently underway at the Ohio company he leads focused on small business. He also recounted his own personal evolution—from computer science graduate to an organizational leadership role, putting him in position to shape a culture of collaboration that makes innovation possible today.
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By Susanne Sclafane career path that starts in the technology department and ends with the top job as chief executive officer hasn’t been common in the P/C insurance industry, but it was a natural for Westfield’s Ed Largent. “If you’re really good from a technology standpoint, then you understand the business; if you don’t understand the business, you can destroy a lot of value spending dollars on IT,” he said. Largent said he prided himself on having a grasp of all facets of the business even back when he moved into his first enterprise-level leadership role as chief technology officer in 2005. “At that point, I’m reporting to the CEO. I’m on the CEO’s team. You could argue that very little about that job is truly about technology. It’s about people and leadership and strategy and execution…It really felt like a pretty natural move for me,” he said.
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Having a tech background has proven especially beneficial given changes in the industry that have gone on during Largent’s 34-year career, all spent at Westfield. “During that time period, there was a shift, I believe, in the requirement for a business leader to understand technology completely. When I started, that was not the case. Technology was that thing that was over there, and we knew what it did and it was important. As I stepped into higher leadership roles, I did feel pretty confident in having that background. I didn’t struggle with technology like a number of my peers who were five, 10 years older.” After graduating with a degree in computer science and a minor in business, Largent started his career in life insurance policy processing after going through a Westfield graduate development program. (Westfield used to have a life insurance company.) He moved on to assume leadership positions within the IT area around 1989. “I worked in or led literally every aspect of a corporate IT function,” he said, noting that moving between all those different roles within IT gave him in-depth
exposure to just about every area of the Midwest super-regional that currently offers personal and commercial insurance in 31 states. “Commercial lines, personal lines, HR, investments, finance—I interacted with every one of those, and it gave me [a] broad perspective and understanding of our business.” Largent’s story could have been very different, he revealed, noting that people might be surprised to learn that he was an accomplished musician from a very early age. “I had multiple full scholarships to go to college for music. The reason I chose Bowling Green [State University] was they paid for four years of my education from a music standpoint, but I didn’t have to major in music. [I] loved it, but I knew it’s not what I wanted to do for my career.” While he started his music training on the piano, excelling on the violin was really what earned him the college scholarships, said Largent, who comes from a family of musicians. His father was a budding concert pianist at a very young age, who ultimately went on to teach music theory and composition at Ohio State and Youngstown
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State and to become a composer as well. His mom, who went to Ohio State on a clarinet scholarship, taught music and then other subjects in the public school system. Those roots turned out to be important to Largent’s future career as an insurance leader. “It had a significant impact on my work ethic and being very comfortable with a dynamic of constant feedback.” Having parents who were professional musicians meant that “I grew up in this world where you worked really hard, you got immediate feedback, you took that feedback, incorporated it, and you kept working really hard,” Largent reported. Throughout the course of his insurance career, Largent also engaged in selfdevelopment as a leader, and Westfield invested in him by allowing him to complete programs at Harvard Business School and the University of Chicago’s Business School. In addition, “my team went to the Thayer Institute at West Point a few years back, [and] Westfield has worked with a retired brigadier general who ran the War College, who uses Civil War and World War II battles as leadership development exercises,” he noted. “That was just part of my path. My recommendation would be really embrace learning constantly and never, ever stop,” he said, when asked if the military exercises were what he would recommend for wannabe future executives in the industry. Highlighting the University of Chicago program as being personally impactful, Largent suggested that with so many programs to choose from, it’s really a mindset that makes the difference. “It’s more about the mentality of ‘I’m going to learn every day and it’s just never going to stop—and I need to learn outside of my organization. I’m not going to learn everything I need to learn sitting inside of Westfield.” The ability to learn from peers across the world in different industries by attending external programs has been welcomed by Largent, who admits that working in one company for your entire career does have its drawbacks. “I ended up seeking out opportunities that would diversify my
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experience without leaving the organization,” he said, giving the example of working on the startup of an outsourcing technology company in India. The company was a joint venture that Westfield and a reinsurer invested in together around 2000. “They sent me over to India many times to work with the CEO to get that company off the ground. That was a very non-traditional P/C leadership experience,” Largent said. A long tenure at one company also has a real upside. “The advantage, for me, has been the depth that I understand this organization…I’ve developed working relationships with countless people here, and that has helped me on my career path because I’ve had the ability to reach into the organization very easily to collaborate and understand what’s going on,” he said.
Leading Change at Westfield
Largent said he believes the biggest success for the company has been its evolution in the last 20 years. “We really started to embrace organizational change about 1998…I’ve been involved in every change initiative ever since. It’s part of who I am, and I feel fortunate [to be able] to bring a skillset that was needed at the right place at the right time.” Recent changes have included an overhaul of Westfield’s claims management platform, the creation of an innovation subsidiary known as 1848 Ventures, a transformation of the physical workspace and even a rebranding that saw Westfield Insurance dropping the word insurance from the company name to become just Westfield. That last change goes hand-inhand with changes taking place today. There’s a “huge commercial lines transformation effort underway, specifically aimed at small business,” Largent said, explaining that this transformation has the insurer and its customers looking beyond risk transfer— the traditional box in which the carrier has operated for 172 years. “The word ‘insurance’ has an amazing connotation in our society. As soon as you bring it up, people’s mindset gets framed
Edward Largent III President and CEO, Westfield
• 1986-2005: Information Technology, various roles • 2005-2009: Chief Technology Officer • 2009-2011: Chief Administrative Officer; President of Westfield Financial; President of Westfield • 2011-Present: President of Westfield • 2015-Present: CEO of Westfield
very narrowly, and part of what we’re trying to do is to broaden that with our commercial insurance customers.” The transformation starts with a focus on understanding business customers “and how we can leverage things like data and analytics in conjunction with that risk transfer to help them be better businesses. It’s a B-A-G,” he said, referring to big audacious goal. “It’s definitely not going to be easy. It’s something that we’re not going to figure out tomorrow, but the journey to get there will be interesting for our customers and for us.” Largent declined to give specifics of how Westfield is solving small business problems beyond risk transfer (for fear of letting proprietary information slip), but he explained that 1848 Ventures is the distinct
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Executive Profile continued from page 41 entity specifically charged with ideas for small business customers. He said that some work to date has focused on small to midsize restaurants, a large customer segment for Westfield. “You don’t have to spend too much time with them to figure their biggest pain points. The first is predicting volume—the ability to have an idea of how many folks are going to walk in today, tomorrow and next week. That fluctuates and has implications on their entire value chain—from buying supplies and food to having enough labor.” Labor is another challenge, he said, highlighting turnover and reliability of part-time staff as issues for restaurants. “Our ideation process basically digs into a business from the customer’s perspective, and we learn these things. Then we start to figure out how we can leverage all the data and the analytics that we’ve got and [how] we can couple that with information we can get outside of our world to potentially help them. It’s a very iterative process, [but] the idea is to ultimately develop some kind of products and services that help them be more successful businesses.” Largent confirmed that one reason it makes sense for an insurance company like Westfield to be involved in solving these business problems is because of its access to data and analytics. “We’ve got infrastructure and capabilities, like advanced predictive modeling that we use in [much] of our business—and then data availability in the world,” he said. Noting that another part of Westfield’s hospitality book is outdoor venues, like golf courses, water parks and amusement parks, he said, “Those folks live and die by the weather. There’s an amazing amount of data available, literally real time to the second.” Westfield might “help with that pain point, which is the volatility of weather affecting their revenue.” “There’s more to this space than just us generating ideas. We’ve built partnerships with some InsurTech firms. We also are positioned to invest through [1848 Ventures] into entities we think could potentially be successful doing what we’re talking about,” he said.
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“A business owner’s definition of risk is different than a P/C insurance company’s definition, focused on risk transfer. Entrepreneurs take personal risk to go into business. They take risk every day because that’s how they’re going to be successful. That perspective is interesting for us to leverage, to broaden our thinking about how we might be able to help.” One publicly disclosed deal is a partnership that Westfield has with a fintech company known as SizeUp, which provides customized data analytics and market intelligence for small business. A SizeUp tool on Westfield’s website allows a business owner to type in location and business type to compare revenues and worker salaries to local competition, with data about local health care and workers comp insurance costs also available.
New Digs
While 1848 Ventures boasts a “designthinking approach to problem solving” on its website, another huge change for Westfield has been a redesign of its physical space, completed last year. “Our objective was really trying to build physical space that would help our people perform today and into the future, emphasizing collaboration, transparency, innovation and an inclusive environment.” “It’s not just a building full of desks,” said Largent. “There’s literally hundreds of different kinds of spaces.” Without workstations assigned, “there
are just a plethora of options for whatever kind of work you need to do at a given point in time,” he said, confirming that his agenda would dictate where you might find him working on any particular day before the COVID-19 lockdown forced everyone to work at home. “I would literally park in a different place and enter the building in a different place, based on what I was doing, what was on my schedule...” “We also really have been thoughtful about bringing our culture and our history alive everywhere in our space,” he said. In the past, it looked like any other insurance company. “We want people to know that you’re at a 172-year-old mutual successful insurance company and here’s what we stand for. These are our values, we want that to come through in what people see and feel in the space,” he said. At least one photo Carrier Management has seen of the interior—with sculptures of farm animals grazing on a patch of greenery in the middle of a cafeteria— clearly conveys that the company was started by a group of farmers. The modern and open meeting areas, including outdoor collaboration spaces shown in other photos, speak to the culture Largent says he leads today. “When we made this move, all assigned offices went away,” he said, noting that he underestimated the powerful impact such a move would have. “Without saying anything, we empowered 2,500 people even more so than they were already empowered,” he said, describing the culture as one that embraces change. Needed short-term changes are something Largent and his team will work out as businesses reopen post-COVID, he said. “The other part of this workspace investment was flexibility and agility. So, we have the ability to change this environment way faster and with less expense than we did in the past…” “If we feel we need to make an adjustment, we’ll be able to make an adjustment. But in the short term—this year maybe—I think we’ll begin to leverage the physical space again, but it’ll be different,” he said.
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Leading When the World Restarts
What’s Next?
How has the pandemic changed you personally? As a leader? How will it change your company? How should the industry plan to respond to future pandemics? Carrier Management asked carrier, reinsurance and InsurTech leaders to tell us how they’ve changed and what’s ahead. A dozen provided answers, writing their thoughts down in late May before businesses started to reopen. Edited responses appear on the pages that follow, with some excerpts presented below. Complete responses are available online.
Tony Kuczinski, President and CEO, Munich Re US Holding “We must acknowledge our own fears, too, as we are also concerned with loved ones at risk.” Bob O’Leary, Chair and CEO, Philadelphia Insurance Companies “I have been forced to become a more patient person. Things will get done—just not as timely as in the past.” Martin Micko, Founder and COO, omni:US “In the future, when we do have face-toface meetings, they will assume a far higher importance than previously.” Alex Timm, Co-Founder and CEO, Root Insurance “Personally, I have been reinvigorated by the business challenges COVID has created. I am at my best when I am solving problems, so I wake up every morning obsessed with figuring out how to make the most of the incredible talent that surrounds me at Root.”
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Matthew Mosher, CEO and President, AM Best Rating Services “Eating lunches or taking quick breaks with co-workers are routines that most of us count on, and for some, the loss of these can create anxiety and stress.”
Mitch Livingston, President and CEO, NJM Insurance Company “Flexing into this new normal will require the same transparent, decisive and flexible leadership that governed the first step in the industry’s pandemic response.”
Scott Gunter, CEO, AXA XL “We’re seeing each other through a different lens and, I believe, that’s strengthening our relationships. Even though we can’t be together, we’re getting closer.”
Craig Welsh, Chief Distribution Officer, Westfield “I’ve watched the view outside a window in my home office. Quietly, it has prompted self-reflection. It has helped me slow down and think about my decisions and priorities.”
Phil Kalin, President and CEO, Pinnacol Assurance “I see this time of enforced ‘virtual reality’ as a gift. We have more opportunity than ever to ‘show versus tell’ our customers and employees that we were built for this, we care—and they can be certain we will be there for them.”
Dan Malloy, CEO, Third Point Re “We may take the attitude that new clients will need to earn our trust. This may turn out to be a benefit—to assess a risk without the human element.”
JULY/AUGUST 2020 | 43
Leading When the World Restarts
Flexibility and Patience Helping Insurance Leaders Through
COVID
Challenges
44 | JULY/AUGUST 2020
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“I am far less set in my ways and have embraced the necessary flexibility to let people find a way to get done what needs to get done.”
O
By Bob O’Leary ver the years, I have been described as “old school” or “set in his ways.” Having been in the insurance business since June 1, 1977, I guess there is a legitimate reason. I am getting old. Never in my wildest dreams did I anticipate the impact COVID-19 would have on our economy and specifically the insurance business. How has this experience changed me as a leader and as a person? Circa 2000, I thought work from home was only for people who wanted to spend the day in their pajamas watching TV while taking an occasional call on their cellphone from their boss. Around 2013, my opinion morphed into allowing “non-outward facing employees” who made the request to work from home, provided their manager approved and their performance review was rated above a certain threshold. In other words, we made the process difficult to get approved. Fast forward to May 2020. For the past three months, I have seen the transformation of our work environment to exclusive work from home while communicating in a George Jetson-like manner via WebEx or Zoom. Employees with young children face the challenges of having little to no childcare while having to get their work done. Managers have needed to embrace the idea that their direct reports will be unable to attend to work in uninterrupted blocks of time and a degree of patience will
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be required to get stuff done. A call may be interrupted by a two-year-old crying for attention, which may result in the call having to be delayed or rescheduled. And it’s all OK. When will we return to the office? That depends on if you are in state X or state Y, as state X has four phases of reopening, while state Y has three (or was that five?). What will it look like? Temperature taking; mask on (do I need gloves?); only send 10 percent of workers in phase one (or was that phase two?); no more than 10 people in a room at one time (or was that seven?); decide whether we need restroom monitors; proper social distancing for all workstations; hand sanitizer everywhere. What if someone tests positive? Do we need to do contact tracing? How do we do this? You know something? This work from home is sounding better and better every day. So, how have I changed as a leader and a person? I am far less set in my ways and have embraced the necessary flexibility to let people find a way to get done what needs to get done. And for the most part, they do. My grandmother used to call me “Esty Pesty” because of my lack of patience. Today, in the midst of COVID-19, I have been forced to become a more patient person. Things will get done—just not as timely as in the past. I have recognized how much time it takes to travel from point A to B and how inefficient (and expensive)
Bob O’Leary
is Chairman and CEO of Philadelphia Insurance Companies.
business travel has been. But I miss the face-to-face, in-person interactions. I seriously doubt too many close relationships will be built on Zoom. I miss shaking hands but doubt I will be offering my hand to anyone in the near future. I miss working out in a gym full of co-workers at lunchtime. You would be amazed at what you can learn from casual conversations in the gym about real business issues. I miss hugging and kissing my grandchildren. FaceTime is great but simply not the same. And finally, I now recognize the fact that my wife really does take care of me. I was always under the impression it was the other way around. No need to call me “old school” anymore.
Leading When the World Restarts
Walls Between Life and Work Come Down
O
By Dan Malloy ne of my team talked about resilience and courage being key words to describe the way our business has dealt with the new realities of a COVID-19 world. These are words I equate with the men and women at the front line during the crisis: the doctors, the nurses, the checkout people at the grocery store, the police—the long list of essential services workers who are helping us all pull through. The word that jumped into my mind first was adaptability. We are in a relatively comfortable position in our industry. Most of us are on full salaries, and we have the technology to keep on functioning every day from our homes. Added to that, unlike a great many other industries, the
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insurance and reinsurance sectors are still able to carry on doing business. But during the last few months, I’ve seen my colleagues, like first responders, demonstrate resilience and courage as their personal and professional lives have been altered and intermingled in a way no one could have envisioned a few months ago. But has the global lockdown changed the way we lead? And has the way our company operates changed as a result? The answer to both has to be yes. The crisis has also forced us as a society to look at bigger issues such as climate change and globalization with a new urgency. (Related article, page 52.) Our open and collegiate culture is embodied in the setup of the head office in Bermuda. The office is open plan. I sit with the rest of the team, which enables us to
bounce ideas around in a collaborative fashion. The interaction and questioning that is part of the way the office works led to a close-knit team. Suddenly, there was COVID-19, and almost overnight the offices shut down and the entire team had to adapt to working remotely from home. If you’d asked me this time last year if we could operate with no offices, keep the company culture going and function as a listed business in the middle of transforming its operating model, I’d have said no.
Functioning as a Virtual Listed Company
But we have adapted, and when it was hard, we persevered. We have had virtual board meetings, completed our filings and held our calls with investors. Some of that was really not easy, but we’re not on our own in this situation and, hey, we did it. A few members of our team were more comfortable with the new normal than others, which was a revelation to us. Younger people were used to coming into the office, putting on headphones and
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interacting on social media. So, in a way, they are at the office but not in it. The older generation craves more direct interaction. We make sure we keep asking the team what is working and what is not. We’ve polled what they enjoyed most about life during lockdown and what they didn't. In response, we have changed the way we do town hall meetings. We now give everyone the option to comment and ask questions, which has allowed people who would not normally feel comfortable in real life raising their hand to have a voice. We need to find a way to ensure we keep this open dialogue going when we get back to officebased working—whatever that looks like.
Looking After Mental Health
Mental health is also a major issue. We conducted an online survey, which almost everyone responded to, to ask staff about their state of mind. We kept it anonymous to ensure people were frank. The downside of this was that if someone had reported serious issues, we would not be able to identify them and try to help, but I hope that we have fostered an environment where they would feel that they could ask for help and know that it would be willingly given. Checking in on each other is important, and we encourage regular one-on-one calls between managers and those who report to them. Some other watchwords for us during the crisis have been patience and understanding. Before the lockdown, there was a Chinese wall between your home life and the office. Most of your colleagues didn’t know an awful lot about your personal life unless you chose to share it. Now, as a result of so many virtual meetings, we get to see inside each other’s houses. We see each other’s kids and pets, and we get a greater understanding of the challenges our colleagues face as they struggle to juggle work commitments with other daily tasks such as schooling their children. This compassionate and patient attitude will, I’m sure, continue after the crisis as leaders try to take a more nuanced approach to providing a flexible working experience for all of their staff.
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“We have adapted. And when it was hard, we persevered.” How to Build Trust Virtually?
Until the crisis, much of our business was conducted face-to-face with clients in offices, coffee bars and restaurants. I haven’t seen a client since March 13 when I was in London. The last time I was in the City of London, I had 20 meetings in three days. I don’t know when we will see a return to this way of working again. Because of the lack of face-to-face interaction, the pandemic is forcing us to change the way we do deals. We are still working on some deals that we originated before March, but we haven’t completed one from start to finish during lockdown— and we are working out how this will pan out for us. If we don’t have the opportunity to meet new clients face-to-face to establish some chemistry, we may have to be less generous in the terms we offer and provide ourselves with more contractual protections. We may take the attitude that new clients will need to earn our trust. This may turn out to be a benefit—to assess a risk without the human element.
Global Attitudes to Leadership Will Change
We cannot forget what we have learned from this crisis when it comes to how our labor force is treated and the value of our local stores and businesses. In our newly virtualized world, we have become used to video meetings, online shopping and nextday delivery from Amazon. Many of us shop at Walmart rather than the local hardware store because it is cheaper. But the neighborhood hardware store is also part of the social web, and the community would be worse off if it closed down. Likewise, we may take for granted the local bar where the bartender knows what we drink, and he may even remember our name. If our neighborhood bar disappeared, there would be a real tear to the fabric of our community.
Dan Malloy
is the Chief Executive Officer of Third Point Re.
How and how soon will service industry workers return to their jobs? Will these workers be paid a living wage? And will governments provide them with an affordable healthcare system? I think that a lot of the emergency measures that have been introduced to help people through the crisis have forced us to consider what is really important to us as human beings, which I hope will be difficult to unwind. We have had to be flexible in adapting to new societal norms and new technology, and be persistent to make the new normal work for us. These will be the qualities our company—and our industry—need to continue to apply as we emerge into an economy and way of doing business that looks very different from the one which we experienced before lockdown.
Leading When the World Restarts
Creating Certainty: Now and in the Future
C
By Phil Kalin ompanies don’t have a choice about the timing and magnitude of a crisis like COVID-19. What will define a company is the choices leaders make from this point forward. How do we move beyond managing anxieties and reacting to the challenges, to evolving and adapting our businesses? For me, the answer starts with creating small pockets of certainty where we can. We don’t know what the world of business looks like 18 months from now, but there are things we can affect in our spheres of influence that will start to define our future state and provide comfort and answers to those who depend on us. At Pinnacol Assurance, we’re viewing this crisis as a way to expand our capacities and point us toward success in a new future.
Giving Employees Certainty
Caring for employees is always job No. 1. At the outset of this crisis our team was frightened, uncertain and craving leadership, worried about their jobs and their safety. While those worries may have eased somewhat, they haven’t gone away. And they have been exacerbated by the exhaustion of solitude and juggling children’s needs. While we as leaders can’t solve all the problems or answer all the questions, there are things we can do. For us as a workers comp insurer, it starts with safety. We’d equipped all our employees to telework two years ago, so it was easy for us to pivot to full-time teleworking. And in the name of safety, we’ve told our employees we don’t expect to return to our building this year. While this will not be without challenges, it creates one of those pockets of certainty: The question, “Will I be safe at work?” is now answered, which creates trust and lets
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them focus on our customers. Frequent and transparent communication, too, is essential—straight talk only, with as many opportunities as possible for dialogue, not just one-way information-sharing. My executives are reaching out directly to employees across the company (not just their own teams) to ask how they are doing and whether they have what they need, both personally and professionally. We’re hosting both small (15-30) and large (400-plus) virtual forums to share information and answer questions. Employees ask the hard questions, and I tell them what I do and don’t know. I’ve heard the gratitude in their voices and seen it in their online posts. Even when I can’t provide them absolute assurances, they know I’ll be candid.
Certainty for Businesses, Injured Workers
As our policyholders and their employees grappled with devastating change, we knew we had to provide them as much certainty as possible. We suspended policy cancellations early on for companies whose cash flow dried up, hampering their ability to pay. Knowing that many of our policyholders were laying off employees, we reached out proactively to ensure the payroll on our books reflected their actual payroll. We created a “zero premium” code for companies that had furloughed workers or put them back on payroll using a Payroll Protection Program loan (since adopted nationwide by NCCI) so they don’t need to worry about paying premium for workers who aren’t working. For injured workers, we first worked with our regulator to make telehealth options more accessible, to make sure they knew they could get the care they needed. Then we looked at what we could do specifically for workers on the front line of
the crisis. Because current law requires a determination of compensability in order for lost-time benefits to be paid—but doesn’t account for circumstances when a worker must be quarantined before learning a diagnosis—we established a short-term wage replacement for first responders and front-line healthcare workers. We are not applying the cost of those benefits against premiums, and we’re also paying for physician-ordered COVID testing for all policyholders. The goal is creating “zones of certainty,” this time for our customers and their employees. Last, Pinnacol is donating over $2.5 million to COVID relief funds across Colorado. We’re fortunate that we’re in a position to help provide a lifeline to small businesses and believe it’s incumbent upon us to do what we can.
Creating Certainty in the Future
While I’m proud of how my company has responded to these immediate needs, it’s my responsibility as CEO to adapt and reimagine future ways of doing business. Like many carriers, we had already invested in a digital customer experience. Knowing that virtual connections will only increase, how do we make our online interactions even more seamless—and simultaneously more human? For example, how can we provide our safety services effectively in a virtual environment? As our policyholders change their own approach to business and transform their own
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Getting Small Businesses Back to Work Phil Kalin
is President and CEO of Denverbased workers compensation carrier Pinnacol Assurance.
“There are things we can affect in our spheres of influence that will start to define our future state and provide comfort and answers to those who
I
By Guy Goldstein strongly believe that insurance is a social good, and as a company Next Insurance strongly values a customercentric approach to service. The challenges of the pandemic have motivated us as an organization to doubledown even further to support our customers in as many actionable and meaningful ways as possible. In light of the pandemic and how much small businesses have been impacted, this tenet has shown to be more important than ever before. Because of this, Next Insurance was the first insurance company in the country to provide relief to its small
depend on us.” employees’ roles, how can we rethink classifications? How can we use virtual tools to amplify the human connection to our injured workers? How can we build on the new ways our employees have created to maintain their bonds—virtual scavenger hunts, game nights, group puzzles, team walks—to further deepen our culture and sense of family if we never have 650 people in our building again? Where do those next pockets of certainty lie? I see this time of enforced “virtual reality” as a gift. We have more opportunity than ever to “show versus tell” our customers and employees that we were built for this, we care—and they can be certain we will be there for them.
www.carriermanagement.com
Guy Goldstein
is CEO of Next Insurance.
business customers. In April, we announced a 25 percent reduction for policyholders’ general liability, professional liability and commercial auto premiums, and we’ve extended that reduction through May, putting $1.5 million back into customers' pockets. Additionally, we have reallocated $250,000 originally intended for producing our first national advertising campaign and instead put those dollars toward supporting small businesses for our Built By Business initiative. This program will support approximately 50 businesses that have been hit hard by the pandemic, hiring them to deliver commissions in-line with their skillsets. A select group of these businesses will also be showcased in an advertisement providing prime visibility in their respective marketplaces. (Editor’s Note: Next hired the businesses to build the brand campaign, commissioning a baker to spell out Next in cakes, a woodworking contractor to build a planter box in the shape of the Next logo, and shoot commercials featuring their crafts and skills incorporating the Next brand.)
Looking Forward
For the next several months and likely years, insurers are going to be dealing with many shell-shocked customers. Given this reality, I think there’s an onus on the industry to be a little less transactional moving forward and to recognize how much people and businesses have been through. We are also going to see more and more customers getting comfortable with digital wallets and payments, online shopping, online health care, education and more. And in our industry, they will be using more companies who can deliver a fully digital online experience.
Leading When the World Restarts
Leading Through
a Storm With
No Clear End
I
By Mitch Livingston have heard business leaders across the country discuss the early days of the COVID-19 response and experiences of continuing operations while protecting their staffs' health and safety. Each described workplaces that had modest adjustments initially but soon transformed the very foundation on which work is done. Our story is no different. At NJM, our focus has consistently been on the health and safety of our staff while we continue in our 107-year commitment to serving policyholders. We began March by educating staff on the need to socially distance. A week later, we closed two of our three offices, sent most of our 2,500 employees home, and arranged for 92 percent of staff to connect to our systems from their new home offices. As I write this in mid-May, we are almost exclusively telecommuting, with just 50 essential employees going to our West Trenton office. Prior to COVID-19, NJM’s last experience in the exercise was Superstorm Sandy in 2012. Then, we engaged both our business continuity and our catastrophe plans to help policyholders rebuild the damage the storm had dealt over the course of two days. This is different. Missing is the calm after the storm. From a leadership perspective, the immediate need at the onset of COVID-19 was flexibility and speed in the decisionmaking process. The closure of physical offices required enhanced engagement and communication through all levels of leadership. Our officer and management teams
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enthusiastically stepped up to the challenge, exercising clarity of decisions, transparency, flexibility and empathy. As a result, we continue to serve policyholders from home with the same levels of care and concern as we have for over a century. The next step is less clear. Optimistic projections assume COVID-19 will remain with us through the fall and into the winter. We must now adjust to a new normal: a storm with no clear ending. State governments across the country have shuttered businesses and limited social interactions on a scale never before seen. Those actions were needed to flatten the curve for the health and safety of all. Their effect, however, is also clear: Many businesses are experiencing severe financial difficulties, and unemployment has skyrocketed leaving many families without a source of income. Given the economic hardships, it is
“Because of the critical role insurance plays in the overall health of the economy, insurance leaders must play a part in discussions of how to reignite the financial engines.” www.carriermanagement.com
Situational, Authentic
Leadership Needed for Crisis and Beyond
W
By Tony Kuczinski
Mitch Livingston
is President and CEO of NJM Insurance Company. necessary to restart the economy. That said, the economic landscape has changed so dramatically over the last few months that business leaders must consider changing both their company’s annual business plans and their strategic visions as well. Moreover, the ability of many businesses to transform from brick and mortar to a telecommuting environment has caused some to believe that the future of work will look very different. Because of the critical role insurance plays in the overall health of the economy, insurance leaders must be part of discussions to reignite financial engines. Government officials across the nation have reached out to business leaders. New Jersey Governor Phillip Murphy created the Restart and Recovery Advisory Council for this purpose, and I will be representing NJM and our policyholders in its deliberations. I am optimistic that councils like this can help government leaders navigate this new reality. Flexing into the “new normal” will require the same transparent, decisive and flexible leadership that governed the first step in the industry’s pandemic response.
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e’ve all faced challenging times, whether an individual crisis at our own company or a broader one impacting the industry or nation. The global magnitude and sheer uncertainty around the pandemic have required another level of leadership. In addition to drawing on past experiences, the most successful leaders have been adapting to a constantly evolving situation. The same approach will be required as the world moves toward the “new normal.” I’ve always been a proponent of authentic leadership, and there’s no better time to demonstrate authenticity. During a crisis you don’t change who you are or how you relate to people, but you do take a hard look at your regular activities and assess
what works and what doesn’t in the new situation. You may need to do a lot more of some and slightly less of others. Practices that were once “nice to do” can quickly transform and become “absolutely need to do.” The next day, priorities can change again. In this regard, leadership is also situational. It is critical to be aware of potential shifts and to be prepared for quick pivots. Frequent contact with employees has also become imperative during this pandemic crisis. People are frightened, or at least unsure—for their children, their elderly parents, their communities. We must acknowledge our own fears, too, as we are also concerned with loved ones at risk. I had a very personal connection to the pandemic crisis, as someone in my own family was severely impacted, and that helped to inform my approach to decisionmaking and communications. Honesty in communications is key. The ramifications of the virus are as new to us as they are to anybody else. The best we can do is share the facts as we know them through a calm and deliberate message. At Munich Re US P/C Companies, the leadership team decided very early on that we would always put our people and clients before company goals, and ensured that commitment was woven through all communications. This type of transparency has built trust and confidence for the future.
Tony Kuczinski
is President and CEO of Munich Re US Holding.
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Leading When the World Restarts
The Big Picture:
How COVID Should Change the Industry
R
esponding to a call for executive viewpoints, industry leaders told us how the pandemic changed them. They also envisioned how the industry should plan for the future.
Dan Malloy, CEO, Third Point Re: The pandemic is forcing us to re-evaluate our attitude toward bigger issues such as globalization and climate change. We have all seen the real reductions in pollution with the lockdown. Many in big cities are saying they hear the birds sing again. We have shown that the world can function without so many flights and so much pollution. However, current unemployment will become a priority over benefits to reductions and emissions. The Federal Reserve is estimating U.S. unemployment could peak at 25 percent, and millions of jobs were lost around the world. I suspect there will be a rush to get as many of these people back to work as soon as possible without really thinking through whether we want to do so in a way that preserves some of the real benefits we have seen, such as cleaner air. I hope leaders will remember.
Scott Gunter, CEO, AXA XL: Insurance plays a pivotal role in society’s resilience. We’ve helped our clients adjust their operations so that they could pivot to help out with what was needed: a coat manufacturer switching it up to make hospital gowns; a distillery shifting to making hand sanitizer. And now, we’re helping them adjust to their “new norm” of operating. Our
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risk consulting team has performed more than 600 remote consultations to help them with social distancing and other changes. Our clients, like us, need to mobilize quickly and operate differently. Businesses that have an entrepreneurial spirit are ready to adjust. Technology companies saw opportunities to pivot their technology solutions to adjust to the current work environment. Sensor solutions, too, could be adjusted to help with social distancing. We need to help our clients think this way. Guy Goldstein, CEO, Next Insurance: The insurance industry, in fact all industries, should understand the value of being 100 percent online and the advantage of providing digital services. Additionally, the government, together with insurers, should come up with a plan to handle unforeseen future catastrophic events that can bankrupt an entire industry. We want to support our customers, but it would be helpful to have some guiding rules of how to enable it together with the government.
Tony Kuczinski, President and CEO, Munich Re US Holding: The broad exclusion of systemic risks such as pandemics is virtually imperative in responsible risk policy, ensuring that going forward, we will always be able to uphold our financial commitments to millions of clients and not endanger this by overstretching ourselves financially. Retroactively rewriting contracts would have dramatic repercussions for the broader economy and supply chain. Today, insurance companies are deploying
multiple solutions to ensure that level of claim processing is not slowed down during the pandemic. Hurricanes and wildfires and earthquakes are continual threats. We will be there to provide options for businesses and individuals to protect themselves as they rebuild. Our industry is poised to play an enormous role in leading as the world moves forward. This is a fundamental value—as disaster strikes, our industry seeks to move people, businesses and communities from harmed to whole as quickly as possible. Craig Welsh, Chief Distribution Officer, Westfield: Agencies now under stress because they didn’t have a digital footprint or the ability to switch to crisis mode will need to change. They can fight or accept that. Those that already had made critical investments in technology and whose digital operations were already highly efficient have flourished during the pandemic. They looked confidently at the crisis as an opportunity and amplified their platforms. A handful reported near-record March and April sales. Here’s an example of new opportunity: Suddenly customers who never took a phone call were eager to spend 30 minutes discussing risk concerns... The independent agency system needs to double down on its value proposition. Who better to ask a business owner, “What would you do if you couldn’t operate for some period of time? What is your continuity plan?” Asking [fulfills] an agent’s value proposition, even if they don’t sell a product to cover the issue they’re probing.
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Pandemic Reinforces
INNOVATION CULTURE
at Root
By Alex Timm
“Even in the early days, my focus
n many respects, we unintentionally built Root to weather situations like the COVID-19 pandemic. We have always been fueled by our passion for identifying what’s not working and rolling up our sleeves to figure out a better way to meet our customers’ needs. That passion allowed us to quickly mobilize the entire organization to address what unexpectedly broke and to start rolling out solutions within a few short weeks. Innovation defines Root. Every day I challenge the team to think bigger, to work faster, to break through walls instead of going around them—to try anything that might improve our customers’ experience. The pandemic simply reinforced the value of a strong culture and the organizational flexibility needed so that happens daily. Together with my leadership team, we decided to shift our organization entirely to remote work in advance of Ohio’s state order. Our bias toward decisive action meant that within just a few days, we had a working plan. As a result, 97 percent of our staff transitioned home in less than 24 hours, including our claims and customer service teams. While many large organizations, across all industries, were still struggling to answer the phone, our customers weren’t even aware a change had been made. They didn’t experience any lapse in service or longer call wait times. In fact, our customer satisfaction scores immediately improved and have sustained over the following weeks. For months now, Root employees have been virtually collaborating to deliver
wasn’t on figuring out what
I
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needed to be done so Root could survive but rather what needed to be true for Root to thrive, even in the midst of uncertainty.” nearly daily product updates to customers, each one designed to reduce anxiety about their insurance. Literally every aspect of our product and experience has been on the table, with lively discussions about everything from retooling our billing platform to launching never-beforediscussed product features to redesigning our marketing strategy nearly overnight. We have also actively encouraged our staff to leverage their expertise to help the community through this difficult time. Personally, I have been reinvigorated by the business challenges COVID has created. I am at my best when I am solving problems, so I wake up every morning obsessed with figuring out how to make the most of the incredible talent that surrounds me at Root. Even in the early days, my focus wasn’t on figuring out what needed to be done so Root could survive but rather what needed to be true for Root to thrive, even in the midst of uncertainty. It is clear that our industry will not be the same in six months as it was just three
Alex Timm
is the Co-Founder and Chief Executive Officer of Root Insurance Co.
months ago, and I firmly believe that there is no insurance company that is as well positioned as Root to be a leading force in shaping the new insurance landscape. In March, we all witnessed a massive shift in driving behavior throughout the U.S., as states and cities issued stay-athome orders. Drivers quickly realized they were paying for car insurance at rates that didn’t reflect the new world order. The largest insurers responded by announcing blanket refunds to the benefit of their customers. The implication was clear: Insurers have been overcharging customers and thus have more than sufficient funds to give back because their rates don’t appropriately reflect true driving behavior.
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Leading When the World Restarts continued from page 53 As a newer company with a focus on providing more fairly priced insurance to our customers, and without decades of profits, we never considered a blanket refund. Instead, we wanted to reward drivers whose driving behavior changed most significantly and who were doing their part to drive down the spread of the virus. We were proud to announce a refund to our customers based on actual driving behavior, measured through our mobile telematics platform. Our access to mobile telematics data will also help us to quickly react to future events, allowing us to adapt and respond to our customers’ needs based on their individual behavior. The value of that capability has never been more clear, and we are already seeing a surge in consumer adoption of telematics. Regulators are also increasingly understanding the added value of telematics and will hopefully make changes in the coming months that ease telematics adoption for both insurers and consumers across the country. Beyond figuring out how to better serve customers, carriers must also focus on how to better serve their employees. Root is lucky. We were born in the cloud, so our workforce was able to seamlessly shift to working remotely. However, we’re cognizant that a culture can change quickly when values and behaviors aren’t naturally reinforced through communal office space. Constant collaboration among HR, engineering, product, claims, customer service and marketing, to name just a few, is critical. Virtual collaboration works, but it can be challenging, too. We cannot assume the remote platforms that have worked so well over a few months will work long term. We recognize that even though we’ve adapted extremely well to the new environment, we hadn’t planned for a long-term shift to a work-fromhome world. While our conversation continues to evolve, my team
and I agree that ultimately we want to be in the same place, at least some of the time. Being together gives us energy. It encourages more active discussion and debate, and it helps us make sure that we’re all working toward the same goal: to better serve our customers, our partners and each other. To be clear, we’re definitely not attempting to bring back exactly what we had in February. Everything turning upside down has taught us all a lot about when and where and how we do our best work. I, for instance, have realized that I am significantly more productive when I can chunk my day into multiple work sessions instead of one long one. I have also realized that glass walls and open working spaces aren’t always the right answer (even when there are no health concerns). And the multiple, short check-ins that replaced our less frequent but longer discussions have led to even greater transparency and communication across the organization. In true Root fashion, we are responding by questioning everything about our office environment. We have an opportunity to create a new and improved space and workflow design that brings together the vibrancy of office collaboration with the flexibility of remote schedules. We have to be smarter about workspaces, about meetings, about planning and about travel. And we will be. Insurance is an essential business. We exist to help customers through difficult times. We can’t fight the shifts this pandemic will bring to our customers, to the economy, to our way of operating. Instead, we have to capitalize on opportunities it creates to invent new services, new products and better ways of solving our customers’ problems. While I was proud of the momentum Root had prior to COVID-19, I am even more proud of what we have accomplished over the past few months and know we will come out stronger in the end.
Clarity Critical for
Startups in Crisis:
P
By Jay Bregman ersonally, my experience at a startup in 2008 taught me that in times of disaster there is a huge premium on both capital and clarity. The capital you have available may be beyond your control based on where your business happens to be in the funding cycle when the world tweaks. But clarity is always in your control. My mantra to myself and other entrepreneurs right now is: Pace yourself, recover, stay active and embrace your routine. As a company, we’ve made some major adjustments since the pandemic. For starters, we’ve embraced a fully remote workplace, with no plans to return to the office. That might sound crazy, but Thimble is unique because we are the only fully automated purchase process in small business insurance. No phone operators, no phone number. In my view, a fully remote culture cements and expands our advantage over traditional providers.
Jay Bregman
is CEO and Co-Founder of Thimble.
www.carriermanagement.com
Leading When the World Restarts
Overcommunication:
A Leadership Lesson From the Crisis
I
By Martin Micko f you asked business leaders at the beginning of March if they thought allowing staff to work from home was an efficient way to run a company, I bet the overwhelming majority would have said no. Some, no doubt, would agree that the greater flexibility this offered employees was a benefit. It also has the added bonus of eliminating the need for the dreaded daily commute to the office. Unfortunately, this view was not shared by most company bosses. They prefer the attitude of the 18th century “father of economics,” Adam Smith, who believed an employee should be paid for a certain amount of hours each day and that they should be physically present in the factory or office so they can be supervised and their performance measured and controlled. Put simply, most modern
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bosses don’t really trust their staff to put in an honest day’s work at home, and they have serious doubts about how effectively they could operate if they aren’t sitting next to one another. As shutdowns were imposed in countries around the world this year, hundreds of millions of staff were forced to work from their houses and apartments—and if companies could not make this transition, they would go out of business. This unforeseen pandemic has been a truly revolutionary moment for businesses and the executives who lead them, including the insurance industry. It has forced companies and leaders to fundamentally re-evaluate the way they run their business. Prior to lockdown, the notion of employees’ entitlement to work from home had largely been decided by lawyers and human resources teams. Did their contract allow this? How many days a
month could they work from home? How could bosses ensure that staff working from home were actually being productive? Until now, leaders had not really taken a hands-on and strategic view of whether home working really was an improvement on the office-based model. In the space of a few weeks, executives began to see that this really does work. Even so, most bosses remain skeptical about whether their
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Leading When the World Restarts continued from page 55 employees are really working effectively while at home. There have been numerous reports of management installing software on their employees’ computers, which take pictures of their screens at intervals throughout the day and monitor the time they spend on the Internet and the websites they visit. The insurance industry has, quite rightly, been criticized for lagging when it comes to adopting digital technology. However, the pandemic will prove to be a tipping point in the industry’s journey toward the digital transformation that everyone agrees is necessary. Many carriers have had digital programs in place for the past five years, but almost will have done more to accelerate the implementation of these strategies in five weeks as they have done in the previous half decade. The use of teleconferencing through Zoom and Microsoft Teams is now ubiquitous—and this will not change substantially when lockdown ends. Insurers and their technology partners have been forced into these changes in order to survive, which means the way we will do business from now on will be fundamentally different. Unable to be in close physical proximity to their staff, executives have had to very quickly adapt to new types of leadership strategies. How often should they have video calls with the workforce generally? Do they use email more? Does senior management need to meet virtually more frequently than before? Has a new protocol been adopted to ensure people don’t talk over one another so meetings are effective? A key leadership lesson the crisis has taught me—and it will remain crucial as we come out of lockdown—is the need to “overcommunicate” with staff. Leaders need to use all channels to reach their teams as well as customers and business partners to explain what is happening, why decisions are made one way rather than another, and what our next steps will be. Regardless of COVID-19, successful leadership teams have always understood the need to communicate frequently with their entire workforce, because without buy-in from staff—particularly in times of
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“The pandemic will prove to be a tipping point in the insurance sector’s journey toward the digital transformation that everyone agrees is necessary.” crisis—the company cannot function properly. The remote working model ushered in by the pandemic has merely underscored the basic principles of good leadership: strong direction, clear communication, building trust across the organization, transparent decision-making. Compared to countries in Western Europe and North America, some forwardthinking but less developed economies have already grasped the opportunities that technology offered to work in a better, more flexible fashion. For example, Estonia introduced free public Wi-Fi in 2001, enabling digitally savvy employees to use thousands of Wi-Fi hotspots to work in bars, shops, hospitals and on public transport. Estonia has among the highest levels of Internet use in the world, allowing huge swathes of the population to work effectively of outside traditional offices. Another noticeable lesson of the crisis has been that it has accentuated any weaknesses that previously existed in teams. Those units that do not have strong leadership and a culture that promotes collaborative working have come under increasing strain when they have had to function remotely. The vast majority of the omni:us technical team, which specializes in AI program development for insurance companies, were based in our Berlin headquarters. They are a terrific group of individuals who continue to work effectively via video. However, some of the problem-solving inspiration that can occur during chats around the water cooler or over a coffee is inevitably lost when they are forced to communicate over video. Now that we have seen all of the benefits of remote working and have stress-tested
Martin Micko
is Founder and Chief Operating Officer of omni:us, an artificial intelligence as a service (AlaaS) provider focused on the insurance industry.
the technology during a real-life crisis, it is safe to say home working will become far more prevalent in this industry. I honestly don’t see the home office becoming the “new normal,” but the flexibility to work between the office and the home will be far greater than in pre-pandemic days. Yes, many will hanker for the opportunity to return to the office and to enjoy the company of their colleagues; however, many of us have welcomed with open arms the chance to work from home and avoid the daily commute. This will mean that in the future when we do have face-to-face meetings, they will assume a far higher importance than previously. Physical meetings will be reserved only for the most essential tasks, and all those attending will make a great effort to extract the maximum benefit from these increasingly rare occurrences. Who would have thought before this that any of us would actually look forward to a meeting at work?
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How AM Best’s Workforce Stays Productive,
Maintains a Sense of Belonging
A
By Matthew Mosher cross the United States, workfrom-home mandates helped to quell the spread of the COVID-19 virus. AM Best moved quickly to get out in front of the work-from-home curve and help its entire workforce transition from in-office workstations to home offices. At the onset of the stay-at-home and social distancing campaigns in the United States, AM Best already had a work-fromhome policy, and many employees took advantage of this on an as-needed basis. We were confident the entire workforce could work remotely but with an expectation of reduced productivity. This seemed reasonable, and our primary concern was to keep our employees safe and help to “flatten the curve,” a policy we had already been implementing for several weeks in our Asia offices. And prior to that, we had conducted testing of our systems, including live tests as an organization
during snow days, so the major difference here was that all of our offices around the globe now would need to work remotely. We are two months into this working arrangement as I write this, and it is clear that our belief that we could weather this level of disruption has been confirmed. In fact, it has gone better than expected given the circumstances. The technology has worked very well, with most employees reporting that operations are running almost the same as if they were in the office. Communication to and from employees has increased outside the office. The work continues, and while there are some minor inefficiencies, we have seen no drop-off in the overall efficiency or quality of our work or communication with rated entities. Our employees do face challenges. Many have taken on the additional role of teaching their children along with parenting and seeing to their work responsibilities. Just finding a suitable place to set up a work station in a small
apartment or finding several workspaces for the entire family in the house can represent a challenge. What AM Best has found is that our employees are resilient and have discovered creative ways to make do. Along with this new work environment has come much greater flexibility to tailor schedules, and our employees have taken advantage without any discernable impacts. To our stakeholders externally, we’ve maintained the appearance of business as usual, but with flexibility as we recognize that for them, too, it is not business as usual. In the early weeks of the shutdown we canvassed employees on what computer hardware they would require to improve efficiency and comfort, and in the following week, we provided that hardware to them. As the stay-at-home rules continued, we ramped up that support, and we plan to invest further going forward to make sure that employees have necessary equipment in the office and remotely and that we are able to continue
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Leading When the World Restarts continued from page 57 to protect the confidentiality of information, no matter what the physical circumstances. That will ensure their productivity, no matter where they are working. However, technology hardware is just a tool that cannot replace the daily face-toface interactions we have with our colleagues. One of the most important things we have learned during this time is how important connectivity is to our employees. Working remotely can be great for ensuring focus to get a specific job done, but the interaction, comradery and teamwork really does matter. Eating lunches or taking quick breaks with co-workers are routines that most of us count on, and for some, the loss of these can create anxiety and stress. We recognized that the connection with co-workers is important and that we needed to account for that dynamic. In solidarity, I have been sending weekly (or more frequent) updates to let everyone know what was going on with the company. We conducted six weekly trivia challenges, with individual and team prizes. Teams in the company were encouraged to work together on their entries. This was not about the prizes, nor was it about the trivia, although I think some people were able to learn more about AM Best and their co-workers. The trivia contests became light-hearted excuses for teams to get together and connect in this new work environment.
“Rating committee recommendations are created electronically. Our meetings with companies now are conducted through video conferencing systems.” Another important request we made of employees was that they utilize video conferencing rather than just a voice call,
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“Working remotely can be great for ensuring focus to get a specific job done, but the interaction, comradery and teamwork really does matter.” whenever possible. Again, this helps to provide a better connection between the participants with face-to-face contact, as we share our workspaces and our homes with our colleagues. We have stressed the need for our people to stay connected in any way possible, whether that be virtual lunches, coffee breaks or happy hours. This connection is important to everyone maintaining emotional stability as we navigate this experience together. A final lesson we have learned is one that can only be learned in a crisis or highpressure situation. Our employees are resilient. We see this with our continued operations, despite the additional work that comes with any stressful event. Our teams have approached the challenge with diligence and good humor and have not missed a beat. I am proud of their high level of commitment and engagement. We have seen an increase in the hours worked to meet the additional challenges. Perhaps that is in reclaiming the commuting time, or perhaps because there is not the standard start and stop to the day, but as a company, AM Best’s greater concern is that our employees maintain that balance in life and make time to step away from their computers. We also have seen changes in how we work. Electronic signatures are the new norm for contracts and approvals, and rating committee recommendations are created electronically. Our meetings with companies now are conducted through video conferencing systems. I expect this will be the standard approach for most of 2020, and time will tell if face-to-face
Matthew Mosher
is President and CEO of AM Best Rating Services.
meetings return to the level of the past. Technology has proven its worth from an operational and cost-efficiency perspective. Going forward, AM Best will take further advantage of these benefits but will also look to augment our resources so that our services and products are provided in a way that is engaging and informative for our clients. Our focus is on continuous improvement as we address the problems that come up to ultimately have operations that fit the work environment needs of the future. Whenever the COVID-19 crisis ends, I expect to see changes in our business environment and in how AM Best conducts business. We certainly will be more efficient and safer in how we connect with our constituents, and able to adapt to the preferences of our clients, but we know this likely will result in less in-person interactions. We will need to ensure that we do not lose the important aspects of our current world: teamwork, a sense of belonging and human interaction. They make our work environment more than just a job.
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My First Days of Leadership— During a Global Pandemic
“It even gave me the
By Scott Gunter
A
quicker than I could have
global pandemic was certainly not in my 90-day plan when I assumed this role in February, but it’s shaping how my leadership team and I are leading today and will lead in the future. From the start of this situation, a clear advantage for us was that we did not sit in one big office to begin with. When you work for a global operation, like AXA XL, with teams scattered around the globe, working remotely is nothing new. We do it every day from offices around the world. When our colleagues began to work remotely, they were already accustomed to video conferencing and online collaboration. We were still able to drive the business and to drive strategy.
traveled to these offices.”
• Remote working works.
AXA XL’s business continuity preparedness and strong IT infrastructure allowed most functions to work from home without a glitch. Our operations transitioned rather seamlessly to remote working. It even gave me the opportunity to host virtual town hall meetings, connecting me with hundreds of colleagues globally—way quicker than I could have traveled to these offices. Our success has broken the perception that if you are not in an office, you are not working. For some colleagues, it’s been a challenge as they have had to juggle children being at home and virtual schooling, too. But they have. We know that we must set up mechanisms to help our colleagues manage these challenges and continue to contribute going forward.
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opportunity to host virtual town hall meetings, connecting me with hundreds of colleagues globally—way
• There are benefits in working differently. Global events like this pandemic bring to light areas that we might not have focused on, or thought about, in the past. As a leader, you might have set ideas as to how business must be done. Now, we see that we can be successfully operating differently, and it’s pushing us to be even more creative. When our risk engineers couldn’t be on-site for risk assessments, we launched remote capabilities. Now we’re asking, “What else can we do differently? Do we need so many in-person meetings? Do we really have to do things this way? Is it necessary? What value does it bring to us and importantly to our clients and brokers?”
• Clarity and simplicity matter.
Another lesson that we are learning is that clarity and simplicity really matter. Where our processes are the most complex is where we have had to work harder to work distantly. Where we have less complex processes, it just works better, without a hitch. The current working environment highlights that streamlining process matters and prompts us to ask how we can take this learning and apply it to better serve our clients.
• We got closer from a distance.
Another silver lining out of this experience is that it’s allowing all of us to bring our full authentic selves to work. As we become a little more comfortable with this way of working, we’ve let people see
Scott Gunter
is the Chief Executive Officer of AXA XL.
behind the curtain and see more about us. It’s OK to be you. That goes for our global colleagues as well as our brokers and clients, too. We’re on calls and we hear children in the background and dogs barking. In the past when these noises intruded on a call, we may have felt the need to apologize; we may have felt some anxiety and the need to explain that we were working from home. Not the case today. We are seeing each other in our home environments. Conversations are pretty open. We’re seeing each other through a difference lens and, I believe, that’s strengthening our relationships. Even though we can’t be together, we’re getting closer.
Leadership Challenges
Leadership Tips:
Don’t Let Negative Emotions Take Control By Kimberly Tallon
T
he social distancing measures we’ve adopted in the face of the global coronavirus pandemic have caused many people to feel increased stress, isolation and loneliness, which not only takes a toll on our mental health but also negatively impacts our work performance. Here are some expert tips to help you and your team get through the crisis without letting these negative emotions take control.
1. Being alone doesn’t need to be lonely.
Social distancing has separated us from our family, friends and co-workers. In the first week or two, many people probably saw the lockdowns as a chance to finally do all the things they wanted to do if only they had the time—learn a new skill or language, read more, try some new recipes, even just clean out their email. As the weeks passed by, however, this forced alone time has caused many people to feel isolated. But being alone doesn’t need to be lonely. How can you combat loneliness? • Acknowledge your feelings and be on the lookout for signs of loneliness: reduced motivation to get up on time or engage in regular forms of physical exercise; excessive procrastination; insomnia; drinking or smoking more than usual. • Remind yourself that this situation is temporary, and try to find a project that gives you a creative outlet and helps you feel a sense of achievement—even something as simple as a puzzle or Lego assembly.
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• Keep in touch with family, friends and colleagues. • Show yourself compassion and don’t compare yourself to others. It’s OK to feel grief, anxiety and even loneliness. It’s OK to be less motivated and productive. It’s OK if you don’t use your lockdown time to learn a new language or how to play an instrument.
Source: “How to Be Alone Without Being Lonely,” HBR Ascend, April 17, 2020 2. Don’t suppress anger; manage it.
While our instinct may be to suppress our anger, that could lead to other problems, like heart attacks, depression or using alcoholism as a coping mechanism. Instead, we need to learn to manage these strong emotions. Be aware of your body. Do you frown when you start to get angry? Do your muscles start to tense? What triggers those physical reactions, and how do you respond? Do you get defensive, aggressive, resentful or enraged? Anger is a buildup of negative energy, but you can learn to channel that energy before it explodes into conflict. Take a moment to distance yourself from your triggers and just breathe. Work off some of the energy with a walk or even a hard physical workout, or use journaling to purge your thoughts. Don’t initiate conversations or make any important decision until you’ve regained control and can think logically.
Source: “Managing anger in controversial times,” SmartBrief, June 1, 2020 3. Get a boost with yoga.
Exercise boosts both mood and health,
which can help people who are feeling lonely and disconnected due to stay-athome orders. But with most gyms and classes still closed, many people are struggling to find a way to exercise while social distancing. Movement-based yoga may be the perfect solution—and it could also significantly improve mental health. Research finds that movement-based yoga improves symptoms of depression for people living with mental health conditions like anxiety, post-traumatic stress and major depression. Movement-based yoga is defined as any form of yoga where participants are physically active at least 50 percent of the time—that is forms of yoga that emphasize holding poses and flowing through sequences of poses.
Source: “Covid-19: Managing mental health with yoga,” University of South Australia, May 16, 2020 4. The power of ritual.
Rituals can help us manage extreme emotions and stress during turbulent times—such as coping with the anxiety and grief produced by a global pandemic. Personal rituals can help lessen our grief after a loss, make us feel closer to our families or reinforce our commitment to our partner. Even little things like how you get ready in the morning or walking the same route during your lunch break can become ritualistic. These rituals, in moderation, can help us gain a sense of control and reduce anxiety and stress. With the pandemic changing so much in our lives, people are using technology to recreate their rituals as best they can,
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scheduling virtual dinners, happy hours or even game nights so they can still interact with family and friends. Others are creating whole new rituals—for example, “one company has started all its virtual meetings by having participants click on images of Patrick from SpongeBob to indicate how they’re feeling.” This kind of ritual may seem silly, but it gives people a sense of familiarity in a new and uncomfortable situation.
Source: “The Restorative Power of Ritual,” Harvard Business Review, April 2, 2020 5. Acknowledge your limits.
Work-related stress can leave us feeling helpless. While the cause of that stress may be out of our hands, we can still learn to control our response to it. Let your team know that you’ve reached your limit and can’t handle additional work or interruptions at the moment. Don’t be afraid to ask for help— it’s not a sign of weakness, and most people are more than willing to lend a hand when it matters. And remember, sometimes the most productive thing you can do is step away from your work to recharge and regenerate. Go for a walk, meditate, or just sit outside for half an hour and do nothing.
Source: “7 Steps To Take When Your Work Stress Gets Too Much To Handle,” Fast Company, April 4, 2016 6. Don’t be a hero.
Burning yourself out by trying to be a hero when a crisis hits could get you into serious trouble. When you try to run on empty for the sake of your team, you may unknowingly model a behavior that causes others to burn out, too. Instead, put your own mask on first. That means setting schedules that help you focus better, making time to chat with loved ones, and getting enough exercise and sleep.
Source: “Cognitive Pitfalls Leaders Should Avoid During a Crisis,” Association for Talent Development, April 29, 2020
www.carriermanagement.com
7. Don’t be afraid to cry.
Sometimes you need a good cry—even at work. And with the last few months bringing a global pandemic, economic strife, increased racial tensions and societal upheaval, people need an outlet for their stress and pent-up emotions now more than ever. Don’t judge yourself or someone else for crying at work. It’s not a sign of weakness or unprofessionalism. And if you’re the person who cried, don’t apologize. However, it might be beneficial to acknowledge your tears and what caused them. Were you frustrated by layoffs? Overwhelmed by your workload? Or was the catalyst something in your home life?
Source: “A Teary Time,” Korn Ferry Advance, May 7, 2020
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Executive Viewpoint: Technology and Analytics
Increasing the Value of Insurance in an
On-Demand World Executive Summary: In the last article of a three-part series, Andy Clapson, data science lead of Slice Labs, describes how cyber compromises and home and auto claims can be detected by sensors, signals and connected devices, helping on-demand digital insurers to proactively reimburse claims—without the need for paper transactions or even Skype interactions with claims adjusters.
S
By Andy Clapson ince I started this series, the world’s perception of insurance and its value has changed. There are countless stories bashing the inability of insurance to protect during a pandemic. Hopefully, the world overcomes this crisis and we find a way to be better local and global neighbors. While many are questioning if they should actually purchase insurance, the foundation that I laid in the first two articles that highlighted the industry’s expertise in building quality relationships and the opportunities for intelligent sensors and signals to better function in an
on-demand world will be even more valid when we exit this crisis. What has become clear as offices, universities and other institutions temporarily shutter is the value of on-demand, cloud-based services. Imagine the economic impact if we couldn’t work remotely or if distance learning wasn’t available. So, how does this tie to insurance? As we’ve previously covered, legacy paperbased insurance applications and stagnant annual policies will not work in this
decade. This fact has been raised by many influencers prior to any crisis. Let’s say you’re a brilliant entrepreneur and you create a new product that could help in identifying, treating or recovering from the coronavirus. If the product is an AI software solution, you could design and launch it from the comfort of your home. As that business grows, you will likely look to general commercial insurance with cybercrime on the rise. Based on data from industry analysts along with experience working with our
The first article in this series explained what P/C insurers should know about AI and behavioral economics. “How Insurance Executives Can Harness the Power of Behavioral Economics” was published in the March/April edition and is available online. In the second article, “Turning Intelligent Sensors and Signals Into Insurance Customer Value,” Clapson described the use of AI and behavioral science in underwriting, price and product development. The article was published in the May/June edition and is available online.
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It is my belief that consumers and business professionals will be praising and requesting more on-demand technology after we emerge from the crisis—and not the opposite. partners AXA XL and Microsoft, the SMB should really consider purchasing on-demand cyber insurance. Not only does the cumbersome process of meeting faceto-face with an agent to complete a long, paper-based cyber application no longer exist, but even before this crisis it was already viewed as a poor service experience. The combination of AI and analytics in on-demand cyber insurance would be constantly monitoring the threat landscape and notifying customers when actions are needed to mitigate risk. Let’s say this
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entrepreneur was compromised, costing perhaps tens if not hundreds of thousands of dollars. With this monitoring, the information surrounding the claim would be easily gathered, evaluated and triaged, and immediate recommendations for mitigating further damage could be made. With the right partners in an on-demand cyber ecosystem, calls and messages could be dispatched automatically and claims payments quickly delivered to customers without any paper involved. This is a very real threat and scenario with the coronavirus as security vendor Check Point had identified 4,000 coronavirus-related domains registered globally since January by early March. In a March 5 blog post, Check Point states that these domains are 50 percent more likely to be malicious than other domains. Before a large portion of the world was forced to consider working from home, paper-based claims processes that required back-and-forth communication to verify and evaluate claims were long processes. With the global economy slowing down and dwindling access to office buildings, these manual, paper-based claims processes are likely even slower. From a B2C perspective, beyond Airbnb’s coverage of trip cancellation, there are still the gig economy entrepreneurs hosting guests that remain vulnerable to loss. Our ability to process claims with video, AI and analytics is highly valuable at a time when access to an insurance agent is constrained, as in-person interactions are going to occur sparingly or purely over digital channels. For those forward-thinking ecosystem service providers or insurers offering on-demand products using sensors and signals, you can skip the need for paper or Skype interactions with the claims adjuster and proactively reimburse customers. This can be done by already being plugged into devices in the home, car or on the person that provide the real-time insights needed to ensure proper pricing and the creation of customized insurance services. If a claim is made related to a connected device or person, the AI ingrained with the sensor could automatically file the claim, resulting
in greater customer satisfaction with the faster, hassle-free reimbursement while also protecting the insurer from the risk associated with properly evaluating and Andy Clapson leads the compensating claims. data science team for Slice This type of intelligent Labs, the first on-demand insurance experience insurance platform. should also reduce Recently recognized as one complaints and improve of the top 40 data insurer brands. scientists in the world Prior to this crisis, we under 40 by Analytics were seeing opportunity Insight, he has helped Slice for near-instant claims transform how insurers and payments due to the other digital ecosystem advances in AI, analytics service providers think and back-end payments about AI, machine learning integration. and behavioral science to Hopefully the current provide intuitive insurance crisis leaves as quickly as customer experiences. it came and we can strengthen ourselves by intelligently using technologies to transform customer relationships and not go back to relying on antiquated services, products and claims processes that have left the insured questioning if there is any value in our industry when a major crisis arises. As China was first impacted by the virus, it gives an indication of how the world may respond with technology post-crisis to better detect and track future threats. Analyst firm Frost & Sullivan said in a recent blog that China could lead an effort to create a global virus detection network. According to Frost & Sullivan, China is forecasted to spend $254.6 billion on IoT by 2025, and IoT sensors and signals would likely be part of such a network. I believe that consumers and business professionals will be praising and requesting more on-demand technology after we emerge—not the opposite. It would be a solid action for the collective insurance industry to set the example with AI, analytics, sensors and signals while still keeping intact those personal relationships that set us apart.
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Technology and Analytics
In 2020,
InsurTechs Come
Executive Summary: In the months ahead, the InsurTech sector will generate a new wave of innovations that are a lot less flashy and much more practical, a panel of experts said at Carrier Management’s recent InsurTech Virtual Summit. While the move toward more practical innovations already was underway, some on the panel said the coronavirus pandemic has accelerated the process.
Down to I
Earth
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By Mark Hollmer
nsurTech startups in their first few years have supplied plenty of flash and dazzle, paired with promises to disrupt and transform the insurance industry through radical changes and inventions. In the months ahead, InsurTech will be officially coming down to earth. The sector will generate a new wave of innovations that are a lot less flashy and much more practical, a panel of experts said at Carrier Management’s recent InsurTech Virtual Summit on May 6, 2020. While the move toward more practical innovations already was underway, some on the panel said the coronavirus pandemic has accelerated the process. But the trend established itself well before the pandemic, they noted. “I think that more and more we will see solutions that have a concrete impact on core insurance processes,” said panelist Matteo Carbone, a founder and director of the IoT Insurance Observatory.” Carbone said this was already happening over the previous six months—a move away from “shining toys” toward more practical solutions. In the coming months, IoT technology will be coming of age, with telematics becoming far more common in personal auto. Through 2020 and beyond, IoT technology will also become more common on the commercial lines side. Panelist Erik Ross, head of Venture Capital & Open Innovation for Nationwide Insurance, agreed. “We’ve seen more recently—and will continue to see, given the current circumstances—core infrastructure. [InsurTech innovations] focused on the value chain,” Ross said. “So, anything that can enable efficiency in the
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lead generation to customer acquisition, to underwriting, to services and claims, those are going to be key components that carriers are going to focus on.” Insurers will look within their own technology development efforts for these innovations. They’ll also look externally at InsurTech startups “to see who’s the best in class that’s focusing on these core areas and look to partner with those companies and also invest if possible,” Ross said.
Difficult Times, Difficult Predictions
Thanks in part to the pandemic, the future of InsurTech isn’t easy to predict right now, said Tim Attia, a panelist and CEO of the InsurTech Slice Labs. “This is a difficult time, [and] I think we’re going through significant disruption right now,” he said. “And when we’re going
“Anything that can enable efficiency in the lead generation to customer acquisition, to underwriting, to services and claims, those are going to be key components that carriers are going to focus on.” Erik Ross, Nationwide Insurance
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through [major] disruptions, it’s hard to see what the outcome will be.” Attia said it is useful for members of the industry to ask questions about why things have to be different and what will be different on the other side of disruption. Operating in times of pandemic means everything is now in question for the industry “I used to think I knew how to wash my hands, and now I am learning to wash my hands again,” he said. “So, from an insurance industry perspective, I think everything is up for grabs. I think there’s going to be some potentially major changes because it’s such a big disruption.” Attia, whose company laid off some employees due to a pandemic-related slowdown, said he sees the future for InsurTech very much an open question in light of COVID-19. “I don’t think there is any way to really see how it’s going to be different,” he added. With that in mind, Attia said on-demand digital might matter much more in the months ahead than it does now. “I’m a big believer in on-demand digital, so I would push and say, well, hopefully coming out of this, insurers will look more to be digital,” he said. Ross noted that the pandemic appears to have accelerated trends already in play. He said digitization, virtualization and the ability to run a company in a more decentralized way are key areas that have gained greater interest. “Core technologies that can enable that more, anything that can help with the customer base…anything that enables the workers and the associates to process and manage claims—I think you’re going to see strong tailwinds behind those,” Ross said. Carbone, on the other hand, said he doesn’t see the pandemic as drastically changing InsurTech trends on its own. “I don’t think that a few weeks of lockdown will change structurally what insurers will do with their processes,” he said. Carbone added that he is aware of InsurTech players already developing technology to improve processes that drew interest both before and during the
“From an insurance industry perspective, everything is up for grabs. I think there’s going to be some potentially major changes because [COVID-19] is such a big disruption.” Tim Attia, Slice Labs pandemic. While he admitted that some companies will need the technology to fit with a more digital business model because of the pandemic, he said the trend would be happening anyway. That said, Carbone expects more strategic, selective InsurTech investments now. “You will have less money to throw away on things that are not relevant,” he said. “[The industry] will be more selective.” Speaking during a separate session of the virtual forum, Martha Notaras, a managing partner with the InsurTech investment firm Brewer Lane Ventures, agreed. “We really need to see people who are selling something that solves an immediate problem for the insurers with immediate [return on investment],” she said. “That’s the only way you’re going to be able to get the attention of the insurers.” She said that “urgent and immediate ROI is going to be important” in securing investment as well as carrier customers.
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Technology and Analytics continued from page 65 “People who are selling direct to consumer, for example, might have a more difficult time if they are not selling a product that [consumers] perceive they need immediately,” she said. “But, for example, if you are able to be selling a product where you are providing serious value to [consumers] at a time when they feel financial pressure or they’re thinking more about risk, the timing could be OK for that.” Notaras said carriers will likely be concerned in the short term about coronavirus losses and pressure to retroactively include business interruption pandemic coverage. That means they
“I don’t think that a few weeks of lockdown will change structurally what insurers will do with their processes.” Matteo Carbone, IoT Insurance Observatory won’t have a lot of marketing head space for wild new InsurTech ideas in the near future. Immediate results will sell more. “Anything an InsurTech can do that literally provides ROI on Day One is going to be the kind of thing that is much more attractive,” she said.
Fewer Startups or More Bootstrapping? While the panelists agreed that the pandemic has taken a big bite out of
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venture financing, some thought that startups might move forward instead by bootstrapping their own debuts. “There is no doubt about the point that there will be less money that will be invested in the next 12 months on new initiatives,” Carbone said. “All the layoffs in the other sectors, even in the insurance sector…I think that will stimulate more people who bootstrap their own initiatives.” He said bootstrapped InsurTech startups are likely to be smaller than venturefunded ones, maybe with one or two people focused on “trying to solve a problem they see in the market.” This will contrast, he said, with the last year in particular, where larger InsurTechs received significant venture funding levels and had grander plans in terms of employment and immediate expansion. Ross argued that being able to bootstrap a company and make “traction and headway” can often be a good strategy to consider “versus taking venture dollars.” But it's not always feasible, especially during a time of economic uncertainty. “The effects of the pandemic on everyone are still unclear,” Ross said. “So, not to say I would disagree with Matteo, but I think it is unclear” whether people have the means to bootstrap their own startups. Still, he didn’t discard the idea of developing a bootstrapped InsurTech startup during tough times. “Some of the biggest innovations came out of the financial crisis [11 years ago],” Ross said. “And if you have time and you can create something that has value, yeah, I could see lots of companies being created that could address some of the more immediate concerns across the board—not just speaking about InsurTech.” He predicted more bootstrapped startups but said their growth trajectory will be uncertain, depending on when they get to a point where they pursue outside investment to enable larger growth.
“Anything an InsurTech can do that literally provides ROI on Day One is going to be the kind of thing that is much more attractive.” Martha Notaras, Brewer Lane Ventures According to Attia, entrepreneurs can still take advantage of opportunities during a period of disruption. “It’s a tough time, but it’s an exciting time,” he said. “Insurance carriers will have new needs. There will be a new need for product, and there will be a new need for technology.” Entrepreneurs seeking to launch a startup in the coming months can succeed as long as they take time to understand what potential customers need, he added. “There is an opportunity to bootstrap if you can get inside of a company, understand what their challenges are and try to formulate how to help them,” Attia said. “Carriers are going to figure things out, and they’re going to get through this, and they’re going to adapt products. They’re going to adapt processes and technology, and that’s going to create an opportunity for people who want to bootstrap.”
Carrier Management hosted the InsurTech Virtual Summit on May 6. Replays of the event are still available at https://theinsurtechsummit.com/
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