The recipe for building a billion-dollar-premium commercial insurance operation from nothing in four years involves mixing a new model for doing business with a supportive and visionary executive team, a fast-paced collaborative and diverse group of “A-level” players, and a leader with a will to win.
Executive Summary“Better…stronger…faster.” With apologies to the “The Six Million Dollar Man,” Michael Chang, one of the P/C insurance industries few Black executives, described his determination to outpace the 13-year build of a $0.5 billion insurance operation he commanded at Chubb, when he signed on to create a strategic business unit with integrated industry verticals under Sompo International, addressing what’s different in his second go-around with a model focused on industry verticals rather than lines of business, and his influence in developing a diverse group of senior leaders for his Sompo Global Risk Solutions team.
During a recent interview with Carrier Management, Michael Chang, the executive who leads the Global Risk Solutions business of Sompo International, described the model—an integrated industry vertical model—and his customer-focused team as part of his explanation to a question about why profitable growth has come quickly at Sompo International.
“Better…stronger…faster.” With reference to the introduction of the iconic 1970s TV character, “The Six Million Dollar Man,” Chang also described his determination to outpace a 13-year build to $0.5 billion in premium leading a smaller operation at Chubb.
In addition, he discussed the mental toughness that carried him forward to become one of the few Black executives in the property/casualty insurance industry in the excerpted interview below.
Q: Tell us about your background.
Chang: I graduated from the University of Pennsylvania in Philadelphia in 1995 with a bachelor’s degree in multinational business management from the Wharton undergraduate program. Then I gravitated toward retail companies because a lot of my internships during the summers were with retailers like Lord & Taylor. I started as a financial analyst at a retailer called Melville Corporation after I graduated, but I just didn’t really like the fact that it was just a lot of crunching numbers. I couldn’t use any of my interpersonal skills.
I started my insurance career with Chubb as a surety underwriter, eventually leaving that position after about a year-and-a-half to join their Department of Financial Institutions in their midtown office.
Michael Chang, Sompo GRS
Chang: When ACE acquired Chubb, I decided to leave. The culture was changing, and I didn’t feel as if it was a fit for me in terms of my career.
I was going to be moving up to take another role when the opportunity to meet with Sompo International, then Endurance, came about. I decided to come aboard to build out Global Risk Solutions, which was based on my concept of creating an integrated industry vertical model.
Q: To what do you attribute the rapid success of Sompo GRS?
Chang: Our integrated model, which is unique in our marketplace. Integrated meaning underwriting, claims, product development, business development, cat modeling, actuary, risk control, all of the pieces that touch the business and how we do business report into the structure—no silos—everyone working toward a common goal. Pieces like claims and actuary would also be matrixed into the head of claims and the head of actuarial.
This model enables everybody in the boat to be rowing together, driving the same result for our end client.
Q: Do you attribute the difference just to having that integrated model?
Chang: It’s a couple of things. First, the talent—being able to bring in the right people that fit our culture, who are able to drive this integrated industry vertical model. That’s one. Secondarily, it’s about the structure—integrated, and being able to move quickly on risk and quickly to solve problems for our clients, agents and brokers, which is difficult for any of our competitors to do.
The third piece is we trade by the vertical on the P&L, not by the product. All of our competitors trade by the product—property, casualty, environmental, etc…And they don’t talk [to one another internally] because they have different P&Ls; so, it’s hard to cross sell the business and do it the right way.
We have industry vertical leaders who have authority across multiple products, who work with the underwriting teams to make the decisions. They’re specialists, not generalists, so they know real estate, they know hospitality, they know life sciences, they know technology. They know them as well as our clients, which allows us to make better underwriting decisions.
For 86 percent of our clients, we have more than one line of coverage. We boast a 97 percent retention rate, and we have very strong relationships with the direct client [to whom] we provide our capital as well as our brokers and agents.
When I look at our clients, they’re diverse. They want to trade with people who don’t just give lip service about diversity and inclusion but who execute on it. And when you look at the operation that we’ve built, and you look at our senior leadership team within the operation, more than 50 percent of Sompo GRS’s senior leaders are women, people of color and members of the LGBTQ community.
I think that gives us a strategic advantage. I have the scope to be able to drive change. And that’s what I do in the way that I lead—really showing this industry how successful a truly diverse operation can be from a growth and a profitability perspective.
Q: At Chubb, you led Financial Institutions in N.Y. and then set up Real Estate and Hospitality industry verticals. But there are more industry verticals under your direction at Sompo International.
Chang: Now it’s real estate and hospitality, which includes hotels but also includes cultural institutions. We write a lot of big cultural institutions, particularly in New York but also across the country.
In addition, we also do life sciences. We do technology. We do financial institutions. And we do professional services firms. Within Sompo International, [on] all of those pieces…we handle the property, general liability, the workers compensation, commercial auto, umbrella, environmental and now parametric insurance. We do all seven lines of insurance for those industry verticals, across large, middle and small accounts. We also have our Asian Risk Solutions group, in U.S. and Mexico, which follows the same white-glove service focus that we’re well-known for in the market. Sompo GRS is now global, with operations in U.S., Mexico and Europe, and expanding rapidly in other corners of the world.
In a short period of time, we’ve now grown that business from zero to over a billion dollars in premium in four years. Put that in perspective: 15 years at Chubb, two industry verticals, real estate and hotels, $500 million in premium; today, [at Sompo International], over a billion dollars in premium from zero in four years.
Q: How have you attracted and retained diverse talent at Sompo International?
Chang: I think it starts from the top. I think people see success in what I’ve been able to do, and if you’re a person of color and you look around the industry and other organizations, they don’t see that. They think, “OK, if this guy can do it, and he’s able to mentor people and drive performance, I feel comfortable being a part of the Sompo International team…I know I can be successful, and I can see somebody that looks like me at the top and aspire to be like him or be like her.”
That’s part of the challenge. People don’t see people at the top that look like them, so they don’t stay around. I think the uniqueness in our operation is diversity is prevalent at the top—not just people of color, but women and people from the LGBTQ community are at the top of our business. They see that, and because of that, our retention among a diverse group of people is a lot higher.
They see it as a real good ground for them to prove that they have the talents and the know-how and the skillsets and the smarts to be successful in the P/C industry. I create roles and I push people hard. And if they are good, they’re going to move up this organization. That’s just what I believe…
We do well by our employees. We recognize and reward them and push them through as long as they have the skillset to drive results, because it’s always got to be about the business results…
We are a fast-paced culture that is diverse but very collaborative with a lot of A-players. It’s not easy to find that talent in the marketplace…You can find A-players that are not as collaborative. You can find people that aren’t as fast paced, but they may be pretty good. But our culture is one where you have to be able to do all three of those things in tandem to be successful within Sompo GRS. That’s why I think we’ve given people who may have been overlooked in this industry that are diverse the opportunity to run businesses—and they’ve been hugely successful in what they’ve been able to accomplish.
Q: Talk about the Sompo International’s Inclusion and Diversity Council.
Chang: I am the executive sponsor of Sompo International’s SIIDC. It was a recognition that while we’ve done some really good things on diversity at Sompo International, there’s more we need to do if we’re going to be that company that aspires to be a top 10 global insurance carrier over the next five years. Part of that is having a culture that is inclusive and diverse, not just in the U.S. but across the globe.
Q: Are the business leaders who are members of the SIIDC a diverse group, or are they mostly white males?
Chang: It’s a diverse and inclusive group of people from across our organization.