In February, Carrier Management marked its fifth anniversary of publishing content tailored for property/casualty insurance executives, directors and future leaders.
Before looking ahead to 2019, we are taking time to look back. Here, we’ve collected executive summaries of the five most popular features—one for each full year we published prior to 2018. On Friday’s newsletter, we will republish the top features of 2018.
Executive Summary: Rapidly shifting business environments and evolving business models are moving companies large and small—including insurers—to hire and promote individuals with the emotional strength, self-awareness and social skills necessary to ride out turbulent times while motivating their teams to forge ahead. Here, Harvey Deutschendorf, an emotional intelligence expert, explains why companies need emotionally intelligent leaders now and provides seven tips for spotting future leaders with high levels of emotional intelligence, or EI.
The sought-after skill is actually a collection of personal traits including self-awareness, empathy and self-regulation, which have come to be described together with the single term “emotional intelligence.” The realization that EI has become an important predictor of job success, even surpassing technical ability, has been growing over the last number of years.
According to Deutschendorf, leaders with high levels of EI:
- Are able to manage their stress levels
- Understand and cooperate with others
- Are good listeners Are open to feedback
- Are empathetic
- Set a good example
- Make thoughtful and thorough decisions
Author: Harvey Deutschendorf is an emotional intelligence expert, internationally published author and speaker. To take the EI Quiz, go to theotherkindofsmart.com. His book, “The Other Kind of Smart: Simple Ways to Boost Your Emotional Intelligence for Greater Personal Effectiveness and Success,” has been published in four languages. Follow him on Twitter theeiguy.
Executive Summary: Mario Vitale retired from his position as CEO of Aspen Insurance on June 30, 2016 after four decades in the industry. As he stepped down, he reflected on the lessons of his career in a letter to his younger self with advice on listening and learning, trusting your intuition, forming relationships, and behaving well in the face of adversity or change.
Among the words of advice he penned to Mario V at age 25:
- In your twenties, spend more time listening than talking, do lots of reading and volunteer for special projects/assignments.
- Tasks matter, but the main role of a good leader is to motivate and inspire other people to perform tasks to their optimal ability. You need to build relationships, network and engage with your team.
- As your career progresses, you’ll need to learn the art of smart delegation and how to lead other leaders.
- Emotional intelligence can’t be taught in a book. It grows from life experience and establishing the confidence in yourself to trust your intuition.
- It’s okay to say “no” if you are not comfortable with the direction of an initiative, and do not let other people push you into decisions you are not comfortable with. Trust your instincts.
- Your behavior will always be watched closely by leaders and can be an excellent opportunity for you to demonstrate your commitment, loyalty and focus… Being impatient, losing focus, making knee-jerk decisions and losing your temper are just a few of the ways that your behavior could negatively impact career advancement.
Author: Mario Vitale was CEO of Aspen Insurance before retiring on June 30, 2016.
Executive Summary: Black Swan Author Nassim Nicholas Taleb gave a short course on risk taking to insurers gathered at the KPMG Insurance Industry Conference in 2015, praising them for knowing how to limit their losses contractually and warning them not to adopt the risk-taking behavior of financial professionals.
“We’re not good at risk taking,” the former options trader and renowned author said. Speaking at the conference, Taleb discussed the difference between well-behaved risks—for which the “portfolio effect” of diversification works well for traders and insurers of non-catastrophe lines—and extreme tail risks.
He also noted that the only time insurers got into trouble was when they learned how to lose money from financial types during the financial crisis.
Taleb also pointed out the limits of predictive modeling, emphasizing its limits for socioeconomic variables. No risk model predicted the economic crisis of 2018, he said, arguing that extreme events are never captured within the models before they occur. However, he said that predictive models can work when predicting a result for a cross-section of the population. They produce valuable data for terrorism and fraud risks, he argued, adding that “stereotypes can pretty much predict who is going to be committing fraud.”
Executive Summary: Five CEOs in seven years, a revolving door of senior leadership made rating agencies and the entire insurance industry wonder what was going on at Fireman’s Fund Insurance Co. Add to this the September 2014 decision by parent company Allianz to absorb the insurer’s commercial lines business.
Here, leadership experts discuss the high cost of CEO turnover in the wake of that news.
Rita McGrath, an associate professor at Columbia Business School, said that CEO turnover draws an organization’s focus and energy away from more productive pursuits. “Everything comes to a crashing halt while the whole company plays musical chairs. The message comes across that the company is either fundamentally lacking in good leadership or otherwise suffering from some flaw that causes a parade of executives to just pass through.”
Former Fireman’s Fund CEO Chuck Kavitsky blamed persistent leadership changes on the widely divergent cultures in place at Allianz and Fireman’s Fund. “Philosophically, Allianz Global is extremely conservative in everything they do. They’re one of those companies that if they experience exponential growth, they’re more afraid of that than a small loss, whereas we in the U.S. tend to be more entrepreneurial.”
McGrath agreed that operating a subsidiary in a foreign country is challenging. “Germans tend to be more conservative and risk-averse. Some insurance products that are par for the course in the U.S., such as workers compensation, are seen as undesirable or even distasteful to a German parent. From what I know of Fireman’s Fund culture, it was not exactly hard-charging and results-driven.”
Author: Russ Banham is a Pulitzer-nominated business journalist and author of 24 books.
Executive Summary: What do CEOs look for when they hire talent? Former Crum & Forster CEO Doug Libby says the answer is game changers.
These are individuals who are visionaries in their specialties. They see the status quo as an impediment and are willing to act on their convictions. They think differently but in a realistic and doable fashion. Game changers see opportunities off to the side when everyone else is looking down the same path.
Libby says game changers must be:
- Intellectually curious. He looks for candidates who are willing to learn all the elements of the business, not just their particular specialty. Insurance is a complex and demanding field. To really understand it, you have to have a working knowledge of underwriting, claims management, regulatory issues, accounting and finance, loss control, actuarial reserves, IT, and marketing.
- Willing to handle tough assignments. Candidates must be willing to learn all parts of the business by taking on tough assignments. In other words, step up and volunteer. Your contribution will be enormous, and you will gain the respect and admiration of your boss and management.
- Creative. Business creativity is questioning every premise, challenging conventional wisdom, not accepting the “truth” of something merely because everyone else views it as obvious, and then thinking through to a new and more viable solution.
(This article is based on a presentation made by Libby at the IICF Women in Insurance Global Conference in New York on June 13, 2013)
Author: Douglas M. Libby is the Former Chairman and Chief Executive Officer of Crum & Forster.