Contents Spring 2014NAMIC's Leadership Initiatives Finding Tomorrow's Insurance Industry Leaders An Industry Built on Servant Leadership
An Industry Built on Servant Leadership
Views from the C-Suite
Safe Building Codes: Pay a Little Now to Save a Lot Later
Safe Building Code Incentive Act
Hit the Boards
NAMIC’s Congressional Contact Program allows property/casualty insurance company leaders to talk with and influence the nation’s decision makers.
Taking over for a long-tenured executive; learning the ropes of a new niche; making tough decisions; encouraging a cohesive environment; or proving that age does not matter, leaders have challenges they face and styles they create based on their journies to the C-Suite. Several NAMIC member company leaders have shared their stories with IN magazine.
Replacing the already retired and soon-to-be retiring baby boomers has been a concern in the industry for a long time now. Recruiting that talent at the college level continues to be a trend. But as more young people start thinking about their career paths in high school – and even middle school – insurance professionals are working to increase interest in the industry at all levels.
Whether leaders are born or made, there are always opportunities for leaders to brush up on their skills. NAMIC recognizes this and wants to help its member companies’ current and future leaders hone their skills. With the association’s certification programs, leadership courses, and other networking groups, members never lack for choices to improve their skills.
When a leader moves into the C-Suite, he or she must rely on direct reports to get the day-to-day jobs done while he or she executes the strategy. For many leaders letting go and delegating is easier said than done, but it is imperative for company success.
Whether a mentoring program is a formal company initiative or an informal business relationship, the skills learned on the job are invaluable, as young leaders garner the talents they need so current leaders know they will leave their companies in good hands.
Insights by Charles M. Chamness
Chuck Chamness is president and CEO of NAMIC. You can contact him at email@example.com
An Industry Built on Servant Leadership
If you haven’t heard the term “servant leadership,” you might want to add it to your lexicon. But even if you are not familiar with the term, you are aware of what it is. That’s because our industry, the mutual insurance industry in particular, is the epitome of servant leadership. With this spring issue of IN being devoted to leadership, I figured there was no better time to share a leadership philosophy and style from which I take significant inspiration.
As a scholar of management, founder of the Center of Applied Ethics – now known as the Greenleaf Center for Servant Leadership – Robert K. Greenleaf was not fond of the top-down, authoritarian leadership style. He liked collaboration much better, and in 1970 he introduced the phrase “servant leadership” in his essay “The Servant as a Leader.” Greenleaf might not have come up with this philosophy – I’d like to think our association has been operating in this manner for more than a century, and our industry has been doing so for more than twice as long – but he gave it a name … and a definition, which states that servant leadership is when people put the needs of others ahead of their own and help others develop and perform as highly as possible.
That definition sounds familiar doesn’t it?
This is also the way I think about NAMIC’s relationship with all of you. NAMIC has always been, for a lack of a better term, your servant. Through our service to you, NAMIC has become a leader … because you have allowed us to be. Our whole purpose as an association is to meet your needs; for without you there wouldn’t be a need for us to exist.
Our “one company, one vote” philosophy means you have the power to make decisions about what we as an association do for you. We listen to your concerns and experiences and use what we hear to craft our agenda of what we’re going to fight for … and against.
When NAMIC staff members talk with regulators, policymakers, the media, or consumers, we do so on your behalf. The agendas they talk about are the ones you have developed. Even when we sit in meetings strategizing our business plan at our headquarters in Indianapolis or at our office in Washington, D.C., we have your needs in mind.
We know that what goes on in Washington and the statehouses across the nation is important to you. We know you want to let the decision makers in these capitols know what you’re thinking and how the laws and regulations they set forth affect you. We understand that you want to do your jobs well and you need the latest information and resources that will allow you do to so.
By working with you, advocating for your interests, and offering you numerous educational, networking, and informational opportunities, you have the ability to develop and grow yourselves and your companies, which allows you to be the servant leaders for your policyholders.
Not every industry can commit to this leadership style. There are many industries that are quick to monetize the value of their franchise and reach for the next big dividend. For them, it’s all about rapid success.
But as an industry that is in it for the long haul and in business for the sake of others, servant leadership fits. It is good for policyholders, good for the industry, and good for NAMIC. We all need each other, which is part of the reason we are one of the longest-tenured trade associations … going on 120 years of uninterrupted service to the mutual insurance industry and leading by serving.
Views from the C-Suite
We ask the important questions and we get the answers from NAMIC member company executives.
What qualities do you admire in a leader? Who, inside or outside the insurance industry, exemplifies those qualities?
What I admire in leaders is intellectual curiosity, vision, courage, self-confidence, communication, willingness to challenge the status quo, and inspiring to action. Leaders who come to mind [that epitomize these skills] in the general business world include Jeff Bezos at Amazon and Sir Richard Branson at the Virgin Group. In the insurance industry, leaders I respect include Glenn Renwick at Progressive and Warren Buffet at Berkshire Hathaway.
One of the qualities I admire in leaders is humility. While Jim Collins might call this “Level 5” leadership or Robert Greenleaf might term it “servant leadership,” it really means being proud of your team, your company, or your organization and focusing on making them better rather than focusing on yourself.
Our entire COUNTRY leadership group recently read “American Icon” and was really impressed with Alan Mulally’s leadership journey after he came to Ford from Boeing. His leadership style of being direct and focused on results while at the same time being humble really resonated with us.
Who do I admire? There is no one I admire. It may sound like I am a snob, but that’s not true. I don’t admire anyone because in leadership you either have a talent for it or you don’t. You can’t teach it. Yes, you can attempt [to teach] it, but if the characteristics are not there, it’s an uphill climb.
Being a leader is being someone who surrounds himself with quality people who make the leader look good. The leader rewards those he places around him to the point that they are encouraged to give more than they ever thought imaginable. It works. [This is] just one man’s opinion, but I surround myself with good people.
Do you think you are a good leader or have leadership potential? Do you think leaders are born or made? Do you seek out leadership training? What types of leadership education works best for you?
Leadership is a Journey
By Lindsay Robison
Every company leader has a story detailing his or her journey to the top. Each executive’s story has its opportunities as well as its challenges – all of which become lessons to be passed along to other current and future leaders.
Seven NAMIC members share their stories.
Click on a member to read his or her story
Motorists Insurance Group
This is my passion. I am in my element. I find that in my spare time I am reading about leading organizations and innovation.
Working as a Team
Like most people who reach the top position in their companies, Dave Kaufman’s journey has been an alphabet soup – VP, CFO, CIO, COO, and now CEO – or EIEIO as Kaufman himself jokes.
Each of those positions with Motorists Insurance Group and its affiliated companies went a long way in helping prepare Kaufman for the CEO position he took over when long-time company CEO John Bishop retired last fall. But preparations began long before he ever stepped foot in the Columbus, Ohio-based insurers’ headquarters. It started back when he began playing high school sports, and that team leadership mentality has followed him every step of the way.
Kaufman captained his high school basketball team as well as the NCAA Division III Ohio Wesleyan University Battling Bishops. And as he has watched his and other companies become more team oriented, he’s been able to bring with him into the C-Suite the skills he learned on the court.
“I think about being a point guard on the basketball team,” he says. “It is more about distributing the ball and setting up others to score. So in the corporate world, it is about making sure you’re collaborating and working alongside [your staff].” Therefore, once Kaufman sets the vision, he passes it off and allows his team members to execute their roles.
This vision-setting opportunity was afforded to Kaufman after it had been announced that he would be taking Bishop’s place upon his retirement. “[Bishop] was there to advise me,” Kaufman says. “He was there if I needed him, but he stayed out of the way and let me chart my own vision and path.”
While similar to his predecessor’s mission, Kaufman’s has its own unique flair and focuses on the principle that “none of us is as smart as all of us.” Kaufman makes sure to talk with others before making decisions. He asks questions, gathers opinions, and makes sure everyone’s voice is heard, all because he believes that “you rise through an organization by having the right answers, but you empower others by asking the right questions.”
And he asks three questions of his entire staff every day. These daily questions are no different from what he’s asked himself for quite some time, but he began asking them companywide upon becoming CEO. He asks Motorists’ employees if they’ve kept their words positive; if they’ve learned something new; and if they’ve given 100 percent of their effort no matter their assignment. He calls this the “Daily Commitment.”
“Asking these three simple questions is effective. You’d be surprised how many people will stop me in the elevator and say, ‘Hey, Dave. I learned this yesterday,’” he muses. “It’s funny. But I’ve always thought that if you’re positive, if you’re learning, and if you’re giving your best effort, then you’re in a high-performing organization.”
Motorists’ track record seems to prove Kaufman’s philosophy correct.
Indiana Farmers Mutual Insurance Company
I am very much a consensus leader. Communication is probably the most important thing. The style we’re really focusing on here is bottom up, not top down.
Making Your Own Path
When Kim Smith took over as CEO of Indiana Farmers Mutual Insurance Company in January upon Daniel Stone’s retirement, she realized that his track record left her with some big shoes to fill. As much as she admires Stone and the direction in which he led the company, Smith is excited to leave her own footprint.
“I think that is one thing that is important for anyone who is taking over a role, especially a role as CEO,” Smith says about mking her mark on the company, “and particularly one where you’re taking over for someone who has been in that role for so long and has made such an impact.
“We have to realize,” she continues, “that we’re starting our own path and set of impacts to the organization.”
Smith began setting her path soon after she learned she would succeed Stone, which she credits for the smooth transition between them. In doing so, she went out on the road, traveling around the Hoosier state to meet with Indiana Farmers’ agents to better understand the ways in which they worked and what they needed from the company to succeed.
Her long relationship with Indiana Farmers also made for a smooth transition. She stepped foot into the Indiana Farmers Mutual headquarters 14 years ago when she began in a newly created position – general counsel, corporate secretary, and head of human resources.
As her experience expanded, so did her level of responsibility as she moved from her original position to senior vice president, executive vice president, and then to the company’s succession plan.
As the company’s newest leader, she wants to make sure Indiana Farmers, its agents, and its policyholders have a common understanding and strong relationships going forward. “We become concerned about numbers, analytics, and the newest piece of technology. We can get too focused on those things,” Smith says, “and while we have to be, we can’t lose sight of the fact that it is still about people, about providing them with security, about helping them in their time of need. We can’t do that if we’re sitting in our offices every day.”
Therefore as CEO, she plans to continue to spread the word of the company’s new vision, which focuses on Indiana Farmers being the smart choice for Hoosier insurance consumers. Smith and her executive team are working to make sure the company is listening to its agents as well as its current and potential policyholders, which means they are beginning to more intentionally engage with their agents and policyholders around the state. This is all part of the effort to “understand what the needs are,” she says, “and execute on those needs to the extent that it makes sense for our business.”
Because when Smith’s path at Indiana Farmers comes to an end, she wants the company to be in a position where it is as successful as she found it and ready for the next CEO’s footprint.
Hochheim Prairie Farm Mutual Insurance Association
[My influence] goes back to [late Hochheim president] John Trott. He was definitely influential in the change in leadership style [at Hochheim] during the nineties to bring the company forward.
Taking Over Quickly
Linda Schmidt’s nearly 37-year career with Hochheim Prairie Farm Mutual Insurance Association proved to be the best preparation for her quick transition into the company’s president position last November.
While many companies today work on a long-term succession plan, neither Hochheim nor Schmidt had much time to plan when former company president Dave Talbert stepped down to pursue other opportunities.
“My first thought was, ‘Oh, this is real, it’s truly happening,’” Schmidt says, thinking about when Hochheim’s board chairman asked her to step into her current role. “But I think I was prepared. All my years of experience, especially the experience in the financial area and my compliance and regulatory knowledge, were big factors in leading the company.”
That financial experience began in 1977 when Schmidt took a position in Hochheim’s accounting department after completing some college courses in accounting and management. After gaining experience in several financial-related positions, she became the accounting manager. But as is customary in the organization, she transferred to another department to broaden her overall insurance skills and knowledge. In her case, it was underwriting. She moved back to accounting in 1990 to once again manage the department. When a new opportunity surfaced in 2002, Schmidt moved into the more senior role of secretary-treasurer and chief financial officer.
Then there are Schmidt’s roots in Yoakum, Texas, Hochheim’s hometown, that made her even more prepared to lead the company. Like the organization, she has called Yoakum home her entire life, and she says that for as long as she can remember, Hochheim has been one of the most desired places in the area to work. She had the company in her career sights, even if being its president was not her initial plan.
Her experience and her familiarity with the town, the company and its employees, agents, and other contacts – as well as their familiarity with her – meant that the change in leadership, although a bit of a shakeup, was a smooth transition.
Her prior appointment put her in a position to help shape the company’s current philosophy, after all. Plus, she did not want to make drastic changes that someone less ingrained in the company’s team might have made. This, she says, provided comfort to Hochheim’s team of employees and helped them continue on the company’s desired path.
That desired path, a direction Schmidt credits to John Trott, the company’s former long-time president, is to be a successful, progressive, technologically advanced mutual insurance company with a commitment to financial stability, quality service, and loyalty to its membership while empowering its employees to make decisions and do their jobs to the best of their abilities.
Jewelers Mutual Insurance Company
Dan Agnew [from Grinnell Mutual Reinsurance Company] is one of my favorite mentors because he made a big difference in a lot of people’s lives.
Winning Over a New Niche
Darwin Copeman has never been much of a jewelry wearer. But that didn’t stop him from accepting the offer to become Jewelers Mutual Insurance Company’s president and CEO when the board asked him to take over more than six years ago.
It was his leadership experience and track record with other insurers – mutual and stock – rather than his jewelry expertise that made him an attractive candidate for the company’s leadership role. It is also what won over the rest of the staff and company’s policyholders and has allowed Jewelers Mutual to continue to thrive.
Copeman’s career began in 1972 at Grinnell Mutual Reinsurance Company, where he gained experience in reinsurance, marketing, research and development, government affairs, profit-center management, and information technology. After 20 years at Grinnell, he moved to Great American Insurance Company and learned the stock side of the insurance business. He then moved back to the mutual sector, as president and CEO of Cameron Mutual Insurance Company.
At Cameron Mutual, he had the opportunity to lead a company turnaround. “We were small but extraordinarily complex,” Copeman says of Cameron Mutual. “That experience taught me how to focus on core competencies … to do what you do very well and to not get distracted by the things you are not good at.”
Copeman’s ability to bring focus to a company in addition to his work experience, made Jewelers Mutual, a company with intense focus and a desire to transform and stabilize, come calling. But it was not without some hesitation from some people within the organization.
“There was some wariness from people,” Copeman admits. “People asking, ‘Who is this guy coming from a property/casualty company we have never heard of?’ And people saying, ‘He doesn’t know anything about the jewelry business. How is he going to impact the organization?’”
Gaining credibility with the Jewelers Mutual staff and stakeholders became his first priority. It was when Copeman met with the company’s agent advisory council and jewelers’ advisory council that he immediately saw a problem. “The operative term of these councils is for them to ‘advise’ us, not for us to tell them what we’re going to do,” he says.
There was too much telling and not enough listening. So Copeman listened and took note of what each council had to say. He talked with and listened to the Jewelers Mutual staff members and he attended trade shows to meet with and learn more about the company’s policyholders.
Word of Copeman’s style spread quickly, and his credibility grew swiftly. His lack of jewelry expertise no longer mattered to company stakeholders; what mattered was that he had a genuine interest in the well-being of the company and its stakeholders.
“I think it’s leading not with ego but with humility,” Copeman says. “It’s leading with a sense of wanting to know as much as possible. I think [the stakeholders] realized for the first time that not only did we want to listen, we wanted to deliver beyond their expectations.”
Because of this, Copeman sees a greater degree of commitment from all parties invested in Jewelers Mutual. “It really isn’t ‘my, my, my’,” he says, “it’s ‘we, we, we.’”
Pennsylvania Lumbermens Mutual Insurance Company
It is important to listen … to really hear what people are saying. Don’t be afraid to make decisions, but make sure you have an understanding of the issue from all possible sides.
Bringing Companies Together
When the CEOs of Pennsylvania Lumbermens Mutual Insurance Company and Indiana Lumbermens Insurance Company met for a social visit a little more than a year ago, talk of an affiliation of the two companies came up. After some much deeper discussion, it was decided to bring the companies together.
The similarities between the two companies made the decision seem easy. But that did not mean John Smith, who remained CEO after the affiliation, met no challenges, with the main ones being how to communicate the affiliation to both companies’ employees, producers, and insureds and bring the companies’ differing processes together.
“All too often in these kinds of deals the reason there are problems is because one group of employees believes they won and the other group believes they lost,” Smith says. “The minute you let that happen, you have problems. That was the conversation I had with the leadership team early on.
“I was able to gain a commitment from the leadership team that the winner-versus-loser attitude would not happen,” he continues, “It would not be tolerated. Everyone had to be considered, and that is a tough thing because it requires you to continually reinforce [that commitment].”
That, Smith says, necessitates communication, communication, and more communication. “Any time there are mergers or affiliations, there are concerns. So what you have to do in my position is be very open with people,” he explains. “You have to have a reputation of being open with people. You have to have a vehicle for questions and you have to answer them as honestly as you possibly can. You also need to make sure you publish those questions and answers.”
Therefore, with decisions made and plans hashed out among the leadership team members, the two companies’ employees met via web conference to talk about the agreement and allow for questions. Employees also received individualized letters explaining what the affiliation meant to each of them, because, as Smith says, that is what he would want to know in a situation such as this. He knows each employee – regardless of the company – was wondering “How am I affected?”
“As the leader, you have to step back and say to yourself, ‘I want to treat the employees the way I would like to be treated,’” he says. “Do unto others as you want them to do unto you, right?”
For this reason, the affiliation agreement spells out that ILM and PLM employees will be treated the same. If or when changes occur, they will happen fairly between the companies. And if one of ILM’s processes works better, Smith plans to make sure that becomes the new standard.
He has also put together transition teams to help make the affiliation process as smooth as possible. With 25 two-person transitions teams – one person per company per team with a senior staff member to oversee them – Smith is making sure employees from both companies are heavily involved and understand their importance. No one wants to live in fear of the unknown, Smith says, him included.
Despite the challenges, Smith is looking forward to the opportunity to lead the affiliation and gain a bigger market share while inflating both brands. Even with the affiliation, the individual brands will remain, as will ILM’s office in Indianapolis.
“It has been a long process and a challenging process,” he says, “but, overall, an energizing process.”
Mount Carroll Mutual Insurance Company
We work together. I lead by example that way. I want to do this together. You have ideas, come see me. I don’t just say ‘This is what we’re doing because I’m the boss.’ I don’t want to dictate to you. I want to come up with a way to get things done the best way...together.
Making Tough Decisions
Tricia Mickley had grown tired of the hectic, unpredictable hours of a certified public accountant, mainly because her desire to begin a family and the CPA lifestyle were not compatible. So when one of her clients had an accounting position open up, she immediately said, “Hey, why not hire me?”
That client – Mount Carroll Mutual Insurance Company – must have thought Mickley’s suggestion was a good one because she stepped into that accounting position in May 1999. While the switch from the “wacky” CPA life, as Mickley calls it, to one in a more stable insurance accounting department one was not a difficult choice, little did she know she would be making some tough decisions in a much larger capacity much sooner than she had ever imagined.
Mount Carroll’s manager was creeping up on retirement age in 1999, and Mickley knew when she took the job that the company would be looking for new management sometime in the next few years. But that time-period prediction was a little off. Eleven months later, Clifton Jacobs retired and Mount Carroll’s board asked Mickley to take his place.
“Because my background was not insurance and I’d only been there a year … I was a little hesitant,” Mickley admits. “But I have a drive in me that made me know I could do it. So I thought, ‘Why not?’”
Unfortunately, when Mickley took over as manager in April 2000, Mount Carroll’s financials were not sound. Some previous decisions and some bad luck with large weather events had put the company in some trouble, with more money tied up in writing than in surplus. Mickley quickly went to the board of directors with ideas on how to pinpoint the problems and get the company back on track.
The decisions that came from those ideas were neither easy to make nor easy to break to the company’s agency force. They meant raising rates and cutting commissions, neither of which, Mickley says, the company’s agents were happy with.
“I had to visit all of them and tell them about the choices I made with the board as to what we needed to do,” she says. “Otherwise, we were not going to be a viable company and they were going to lose us. Being new to the company, I wanted the agents to like me. And then I have to make some choices they weren’t happy with? That was difficult.”
Now, nearly 14 years later, as Mickley looks back on the tough decisions she faced early on, she knows she made good choices. The company is back on its feet and rather than facing the fear of having to merge with another company, Mount Carroll’s financials are sound enough to be the one helping other companies in financial need.
And even though Mickley was nervous then to break the news to her agents, she’s glad it happened when it did. She thinks having those tough talks would be even more difficult now. “We’re such a small company that I have developed personal relationships with our agents,” she says, “and at that time, I really didn’t have any [of those relationships] because I was so new.
“Lucky for us, we made good choices and we had some good weather,” she continues, “and we’re all doing well today.”
Farmers Mutual Insurance Company
Many of my influences are my life experiences. I had a Boy Scout leader who was retired military and very stern, but he was very caring and understanding. Thinking back on it, I’ve learned from people like that in my life. The people in our lives influence us, and it is really a combination of our experiences.
Overcoming Age Bias
Justin Lear, CEO of Ellinwood, Kansas-based Farmers Mutual Insurance Company, might be one of the rare industry professionals who set his career sights on insurance from the beginning. Those sights led him to become a farm mutual manager before he graduated from college. While his age posed some challenges, it’s brought even more opportunities.
Lear’s family has a history in the insurance industry. His family owned an agency, where he had been doing odds-and-ends jobs since he was old enough to legally drive. So when it came time for him to look at colleges, Lear focused on ones that offered insurance programs. Southwest Missouri State University – now known as Missouri State University – was one of his few options.
Having the pre-college work experience combined with the SMSU education put him at a unique advantage. “The school of hard knocks is where we learn most of our skills,” he says, “but the education was good. It brought a better understanding of the industry as a whole.” And because he was doubling up on these real-life and book-life experiences, he started managing Bolivar, Missouri-based Polk County Mutual Insurance Company as a junior in college.
Maybe because he has been a company leader for so long, Lear is more in the “leaders are born” camp. But he also believes leaders should never stop seeking knowledge. “We are born leaders,” he says, “in that we are put into positions where we have room for learning and growth.”
Born leader or not, Lear’s age was a challenge at the beginning of his career. “Especially early on, when I was in my twenties,” Lear remembers, “it was difficult to go into some meetings and not think people were second-guessing me or thinking I was just a young kid with wild ideas.”
Whether that challenge was really what his older colleagues thought or just an internal obstacle that Lear himself had to cross, he took those opportunities to prove himself. He says he did that by being prepared – a motto he has hung on to since his days as a Boy Scout.
“My family jokes with me about it because whenever we pack for a trip or something, I always have everything we could ever possibly need,” he laughs. “But I use that [motto] at work in my preparation for meetings, events, and even [regular] conversations. I know what information I have and what I have to relay; I never leave questions on the table.”
Lear is no longer the youngest person at his company. He says Farmers Mutual has a good blend – finally – with about half of his employees being younger than he. But there is no question that he’s a leader. Now in his early 40s, Lear is one of NAMIC’s most well-respected farm mutual managers.
But he is still learning. Because although he has achieved a top position early on in his career, he believes there is never a ceiling when it comes to education, and he will take every opportunity to learn more. “That,” he says, “is what makes any career worthwhile.”
The Employment Gap
Finding Tomorrow’s Leaders...Today
By Julie Vincent
It’s no secret that baby boomers outnumber members of generations X and Y combined almost two to one. And, we know baby boomers are retiring in large numbers every day. This exodus of both bodies and core competency is eventually going to impact nearly every profession … and hard. Luckily, the insurance industry recognizes this and is taking proactive steps to ensure insurance industry ranks can be filled with eager, capable young professionals.
NAMIC has the Young Leaders Circle, an affinity community designed to bring together and nurture young leaders employed by NAMIC member companies. It’s a great tool for members who aspire for greater responsibility and influence to develop and network. But what about the pipeline? How will the insurance industry as a whole compete for young professionals and encourage them to make insurance their career choice?
There are several colleges across the country that are doing just that … finding and grooming insurance industry professionals and getting them ready to enter the profession right out of school. Some students are even committing to insurance-related degrees and working in insurance companies while they are still in high school.
Kent State University’s Salem, Ohio, regional campus houses the university’s insurance studies program, where aspiring insurance professionals can earn a Bachelor of Science. The degree was approved in the summer of 2012 and the campus began enrolling students that fall. Students have a choice of taking all the courses online, on campus, or both. There are concentrations in property/casualty and life and health as well as for current Chartered Property Casualty Underwriter designation holders who may not have completed four-year degrees. This concentration exempts them from taking five specific courses.
“Ohio is the seventh-largest state for insurance employment, so it’s vital that we are proactive in our effort to bridge the industry’s talent gap,” says Carol Blaine, a Kent State lecturer in the insurance studies program and the one who developed the curriculum for the four-year degree. “Studies indicate the state of Ohio will be short at least twenty-six thousand insurance employees by 2017. The whole point of our degree is to do things well but quickly because we realistically have only four to six years to have an impact on that talent gap.”
Blaine says that while there are other colleges now creating insurance programs, Kent State was the first university in Ohio to offer a bachelor’s degree in insurance studies. The degree is a combined effort by the industry and the university and provides students with expanded employment and career opportunities. By 2016, Ohio’s insurance industry workforce is projected to grow by 7.1 percent, but couple that with an estimated 25 percent of the industry workforce planning to retire by 2016 and therein lies the talent gap. Currently, the insurance industry in Ohio employs more than 100,000 people.
“We started working with members of the insurance industry in 2009 to make sure our offerings aligned with what the industry needs,” Blaine says. “A report issued in 2005 indicated the insurance industry lacked partnerships with higher education and needed to create a pipeline for young people to enter the field.”
In 2011, Blaine was employed by Nationwide Insurance, had 37 years in the insurance field, and served as chair of the education committee for the Ohio Insurance Institute. That year, there was a statewide career summit that brought industry leaders, higher education representatives, and the state’s governor together to start solving the upcoming dilemma. It was then that she left Nationwide and began designing the insurance studies program for Kent State.
Now that the bachelor’s degree is up and running, Blaine says work has begun to expand the program to the state’s high schools. She is currently finalizing hybrid high school courses and will be instrumental in training high school business teachers. The Ohio Department of Education is currently recruiting teachers for the program’s pilot phase.
The idea of starting to recruit students during high school has definitely caught on and could start even younger, according to Jason Terrell, director of programs for the Griffith Insurance Education Foundation. Griffith is a nonprofit educational institution that promotes the study and teaching of risk management and insurance. The foundation offers education programs and resources for students, teachers, academic institutions, and public policymakers.
Griffith will launch a web platform designed to educate and excite young people about the many opportunities and prospects of working in insurance. Emphasis is on increasing understanding of the full spectrum of insurance career options. Terrell believes a unified industry voice increases impact, content reach, and workforce prospects.
“Studies show many students begin thinking about what their careers might be by middle school ….”
“We are well into the process of developing an initiative for the insurance industry that will encourage this next generation to think about a career in the insurance field,” Terrell says. “Studies show many students begin thinking about what their careers might be by middle school and start working toward it in high school. The industry needs to establish a way to ensure a continuation of interest in an insurance career from middle school to high school to college to career. Our initiative will not replace anything currently out there; rather we are serving as an aggregator of successful efforts.”
Michigan shares similar concerns about the insurance industry talent gap. Olivet College, in Olivet, Michigan, has had an undergraduate insurance program since the early 1980s. Carol Breed, professor of insurance and risk management and director of Olivet College’s Risk Management and Insurance Center, says her program has really benefitted from what the insurance industry has realized in the last five or so years – that the talent gap in the state is real and continuing to get larger. Olivet offers three insurance major concentrations: underwriting, claims, and marketing.
“Currently, Michigan has more jobs in insurance and financial services than in manufacturing,” Breed says. “The clock is ticking. The average age that insurance industry professionals retire is in their fifties, which is younger than some professions. There is truly opportunity for young people in Michigan in the insurance field.”
Breed says the insurance industry as a whole now admits it didn’t put enough effort and collaboration into recruiting, hiring, and training new talent. “And today, with a four-year college degree taking, well, four or more years to complete, it’s not good enough to start recruiting college-age kids. We felt it necessary and beneficial to start recruiting at the high school level.”
Olivet College has partnered with the Eaton Intermediate School District – Career Preparation Center and with Farm Bureau Mutual Insurance Company of Michigan to offer an insurance and risk management program for high school students. Started in 2011-2012 academic year, the program allows high schoolers the opportunity to take three Olivet College insurance courses in Farm Bureau’s Lansing headquarters. Students earn high school credit while completing Olivet’s principles of insurance and risk management, personal insurance, and commercial insurance courses.
“Our program allows high school students to earn direct college credit from a four-year institution, giving them a great head start into their college career,” Breed says. “It’s also a real money saver for the students. If they are willing to take summer school, a way to get a four-year degree in three years. The even better news is that we have a one hundred percent job-placement rate.”
Ralph Hansen, the associate superintendent of the Eaton Regional Education Service Agency, has created many high school programs that facilitate students being able to transition directly into a chosen field. Helping students enter the insurance industry is a first for Hansen, and this is the first program that received state approval from the Michigan Department of Education.
“We are located in Lansing, Michigan, the mecca of insurance companies,” Hansen says. “It’s where it’s at in the state of Michigan for insurance. It became clear a few years ago that we were experiencing less access to jobs in the auto industry. So we asked ourselves where the next opportunity was for our students, and it became clear. It was the insurance industry that rose to the top of the list. We contacted Olivet College and the rest is history.”
Hansen says he couldn’t be more pleased by this partnership with Olivet, his school district, and insurance companies like Farm Bureau. “It’s just an excellent example of public secondary education, private and public post-secondary education, and the business community working together. It’s the answer to education offering relevant coursework and truly helping prepare students for meaningful, rewarding careers.”
Breed credits Farm Bureau with much of the high school program’s success, saying the company has been generous from the start. Farm Bureau has now built a classroom in its headquarters just for these students. The high schoolers come every morning by bus to the headquarters and spend two hours there. Professional dress is required, and Breed says some students even carry briefcases. Eaton School District furnishes the students with laptops. The students take their roles very seriously and so does Farm Bureau. Each student is also offered summer employment with the company.
Farm Bureau is proud to be a key partner with the program, according to Jim Robinson, the company’s executive vice president. “I am truly energized by our partnership with the bright, young high school students from the Eaton Intermediate School District and the enthusiastic instructors from Olivet College tied to building insurance knowledge and awareness,” he says. “I’m encouraged by the fact that we can supplement their learning process through the addition of the subject matter experts from our team of insurance experts here at Farm Bureau Insurance.
“In addition, if the students have successful classroom experience, we guarantee them a paid summer internship, which continues their exposure to our industry and our organization,” he continues. “Probably the most important benefit of this program is to give students exposure to our industry at a time in their educational journey that might direct them to an insurance career in the future.
“The key is that we are planting a seed early in their education so, ultimately, they may [answer the] need for insurance talent in our industry – and quite possibly our organization,” Robinson continues. “People don’t generally grow up thinking about a career in the insurance business. This program is starting to change that.”
The program is job shadowing at its best, according to Breed. “And, best of all, after completion of the three courses, the students can opt to take three national exams administered by the Insurance Institute of America and work toward the Associate in General Insurance designation.”
At the end of the first year of the program, an Eaton high school senior successfully completed all three exams and the ethics exam to earn the AINS designation. He is currently an undergraduate student at Olivet, majoring in insurance and risk management. At least five other students are now studying at Olivet, which makes Breed proud – she is a 1998 graduate of Olivet. She became a professor at Olivet in 2001 after graduating from law school.
“Earning the AINS designation at any stage of one’s insurance career is quite an accomplishment,” she says. “To earn it as a college student is truly noteworthy. To earn the AINS as a high school senior is remarkable. In the current class, four students are on track to earn the designation.”
Breed and Hansen plan to take this scalable program to at least two more school districts by the fall. Breed says the program has all the ingredients to make it work – young, enthusiastic students, great curriculum, and companies willing to partner with it. The application for approval by the Michigan Department of Education’s Office of Career and Technical Education has been submitted, which will allow duplication of this program in other areas of the state.
“When we set high expectations for our students, they rise to the standards,” Hansen says. “This is just such a win-win.”
Changing Attitudes about Insurance Careers
By Alaina Sullivan
National programs such as InVEST have been created to recruit new insurance employees. InVEST, founded in 1970 by the Independent Insurance Agents of Los Angeles, educates students to make them better insurance consumers. Steve Dach, the program’s creator, believed a successful business could be created by a quality recruiting program and developing and retaining the best of the best. The program quickly expanded to teaching insurance agency and company operations, encouraging students to pursue careers in the insurance industry. It remains a free program and provides all of the materials needed, including lesson plans, textbooks, and activities.
“Survey results from the Agency Universe Study by Future One pointed to InVEST as a solution to save the future of the industry, with a majority of respondents stating the insurance industry should encourage high school students and community colleges to help students plan for insurance careers,” states Bob Rusbuldt, president and CEO of Independent Insurance Agents and Brokers of America, on InVEST’s website.
Dryden Mutual Insurance Company is in its 20th year running its InVEST program. Managers from the company teach insurance classes in three local high schools. Robert Baxter, CEO and general manager of Dryden Mutual, is proud of the results the InVEST program has produced in his region.
“We’ve been able to pick some pretty talented people in here with a good work ethic,” Baxter says. “They start off with their parent’s attitude toward insurance, but by having them come in the office, they watch how people view their jobs and realize all of the adults inside view themselves as working in a service organization helping people. Period. In times of difficulties – tornados, wind storms, lawsuits, fires. They do a turnaround. They have to see it; you can’t tell them that.”
Dryden Mutual offers internships to some of the more motivated and successful students, and, later, jobs to local college graduates. Many students go to school part time while working with Dryden Mutual. The company pays for tuition as students get skills inside and outside the classroom.
The tasks given to these recruits are not always the most glamorous. They run the mailroom, work in the direct billing department, assist with filing of claims, and assemble policies; however, they do not do this work for nothing. Their compensation is much more than minimum wage, which Baxter says shows the value of the work they are doing and gives them a glimpse of the benefits hard work reaps.
In Dryden Mutual’s 20 years with the program, 19 students have become company employees. “The beauty of this program is that we get to work with [students] in real situations and we get to see their work ethic,” says Baxter. “You can’t see that on a test score. You can’t see that on a grade. But you can see it in their work.
“It gives us a chance to road test them and see how they work in our environment,” Baxter continues. “Not all stick around, but a lot make good workers.”
Certifications and Accreditations
To learn more about any of the programs included in NAMIC's Leadership Initiatives, visit NAMIC.org.
NAMIC's Leadership Initiatives
PFMM Roundtable Breakfast at NAMIC's Annual Convention, September 25, 2013
What is leadership? What makes a good leader? Are leaders born or made? How do you become a good leader?
There are probably as many answers to these questions as there are books on the topic, which according to Stan Slap, one of NAMIC’s 118th Annual Convention keynote speakers, there are about 389,000.
But NAMIC wants its members to have at least some answers, which is why the association has made it a priority to give its member companies’ current and future leaders ample opportunities to hone their leadership skills.
NAMIC developed the PFMM program to provide its farm mutual company leaders – and future leaders – with education as well as recognition for their accomplishments and dedication to their companies and their industry.
Since 1973, the NAMIC Merit Award has been given to NAMIC members to recognize and encourage professional development. NAMIC members inducted into the Merit Society are those who demonstrate educational attainment and service, contributions, and leadership through NAMIC as well as their respective state or province association activities.
As NAMIC’s newest leadership endeavor, Project Leadership is all about making sure future – and even current – leaders move forward in their careers. It is focused on developing strong leaders through leadership-focused mentoring and education. Several NAMIC functions fall under the Project Leadership initiative.
Leadership Development Workshop is a one-day workshop that provides aspiring leaders, as well as current ones wanting a refresher, with critical leadership and managerial training for the industry. New T.E.A.M. classes commence at this workshop.
NAMIC started the Young Leaders Circle as a way for up-and-coming 30-something to 40-something mutual company leaders to seek out one another for networking, education, and advice. YLC uses LinkedIn as its primary outlet for members to connect.
The Advocacy Agenda
Safe Building Codes: Pay a Little Now to Save a Lot Later
By Lindsay Robison
The politics of federal spending have become so toxic that even smart spending measures meet roadblocks when making their way through the halls of Capitol Hill. When politicians hear that a piece of legislation will have a cost, however minimal, the recent trend has been to shy away from it, even if it promises to save money – and lives – in the long run.
This is what has happened in the past with legislation to incentivize states to adopt and enforce stronger building standards. Although a National Institute of Building Sciences study found that for every $1 spent to build stronger structures American taxpayers save $4 in federal disaster assistance, politicians get caught up in the $1 of spending, according to Jimi Grande, NAMIC’s senior vice president of federal and political affairs.
“It is seemingly hard for an elected official to take the long view,” Grande says, “and they think ‘Maybe I won’t get re-elected if I spend a dollar now. Then it will be someone else five years from now who saves the four dollars.’”
Unfortunately, legislators have overlooked the numerous post-natural disaster studies showing the staggering dollar amounts in savings had stronger building codes been in place. But through the efforts of NAMIC, its members, and the NAMIC-founded BuildStrong Coalition, 2013 might have been a turning point for building code support from Congress, and NAMIC is looking forward to continued progress in the remainder of 2014.
The BuildStrong Coalition and the insurance industry celebrated key progress in 2013. The Safe Building Code Incentive Act, which is the coalition’s key focus, was offered as an amendment to the Federal Emergency Management Agency’s reauthorization bill, a major success for the bill’s proponents.
Last November, the Insurance Institute for Business and Home Safety and BuildStrong hosted a roundtable discussion and site visit to IBHS’s South Carolina-based research center. Participants included four members of Congress and South Carolina’s governor, Nikki Haley. House Transportation and Infrastructure Committee Chairman Bill Schuster, R-Pennsylvania; SBCIA co-sponsor Rep. Mario Diaz-Balart, R-Florida; Rep. Mick Mulvaney, R-South Carolina; and Rep. Lou Barletta, R-Pennsylvania, witnessed a wildfire test and learned more about the increased safety stronger building codes provide. They also heard from stakeholders about how increased standards will impact their businesses and lives.
“Having four congressional members and a governor visit the IBHS facility and engage with us on this topic is a major milestone for the BuildStrong Coalition,” says Caitlin Lucchino, NAMIC federal affairs director. “A key to getting the SBCIA passed is better educating Congress on the act’s benefits, and this was a great opportunity to do that.”
Jim Salek, senior vice president of underwriting for USAA and an executive committee member for the BuildStrong Coalition, who has been active in getting the word out about the importance of the building codes legislation, represented his company at the roundtable and was enthusiastic about the discussions with the congressmen and the reactions he saw from them.
“We probably did more in that six-hour period in terms of helping them understand the issue and the fact that we can actually do something about it,” he says. “I think they walked away very excited.”
Having the SBCIA introduced as an amendment to a bill during a committee markup and hosting the IBHS event weren’t the only signs of progress in 2013. Members of the coalition testified twice before congressional subcommittees and BuildStrong hosted their “Building Codes for a Stronger and Safer America” forum and launched a grassroots advocacy campaign at the beginning of hurricane season.
The coalition also added new members, bringing the American Society of Civil Engineers and the International Association of Fire Chiefs into an already diverse membership that includes builders, architects, financial services, insurance companies and associations, and emergency management groups. Having that mixture adds more credibility than the insurance industry alone could bring, and it paints a richer picture of the impact stronger building code legislation would have.
“It is not just an issue of money, it shows that it is also a safety issue, especially when we bring in the firefighters,” Lucchino says. “Hearing from a local firefighter is very powerful for members of Congress. When firefighters talk about building codes, they say ‘After a disaster, no matter what disaster, we run in; we don’t question standards or safety.’ But they can talk about how standards would help them. That gets everyone’s attention.”
And Congress is paying attention. The bill already has 33 co-sponsors in the House and five in the Senate. Lucchino says that the act is attractive because it is an incentive rather than a mandate. States that adopt and enforce the building codes included in the SBCIA would be eligible for an additional 4 percent in post-disaster grants from FEMA.
Even with last year’s successes, the work to get stronger building codes on the books is far from over. Because, like everything else in Washington, D.C., the process to get this incentive legislation through Congress is not quick. But NAMIC and BuildStrong have no plans to slow down their efforts in 2014.
Advocates will continue to push the SBCIA. They also plan to continue their work with state officials to adopt better, stronger, and safer codes “regardless of what Washington does,” according to Grande.
Another area of continued focus will be education; not only of legislators but also of consumers.
That education, Grande says, will come from talking to consumers about the need for safer building codes and the benefits that come from them. “We have fourteen hundred member companies and hundreds of thousands of employees in those companies who can talk about it,” he says. “We can ask questions [about home safety] of our families, our friends, our neighbors, and our policyholders. Then we can talk more about the importance of building codes and the need for them.”
Education will also come from providing consumers with the tools they need to ensure that their homes and businesses are safe – much like the tools the industry gave automobile owners to gauge the safety of their vehicles. These tools are currently in the works, one of which is a partnership between IBHS and the Department of Homeland Security to develop a program dubbed Resilience STAR, which is similar to the ENERGY STAR program that helps consumers become more energy efficient.
“Through the pilot project, DHS will work together with the private sector to engage homeowners, builders, and contractors in communities at high risk for certain natural disasters to identify proactive steps to enhance the resilience of the homes,” the DHS website states. “The project will allow the private sector to identify and designate residential homes that are voluntarily built or remodeled that could employ design features that are both affordable and proven to enhance resilience to disasters.”
This is all in hopes that consumers will start asking for safer homes and buildings – again, much like they have with automobiles – because that is when the industry wins, according to Grande.
“When consumers start asking for it is when you will see the marketplace catch up really quickly,” Grande says. “It is one of those things that we as an industry have to have the fortitude to keep repeating our message over and over again. We will win these conversations one by one.”
The Advocacy Agenda
Watch the House of Representatives Transportation Infrastructure Committee hearing on FEMA Reauthorization Act that includes remarks on the Safe Building Code Incentive Act.
Safe Building Code Incentive Act
IN magazine spoke with Rep. Mario Diaz-Balart, R-Florida,
primary sponsor of H.R. 1878, and Rep. Albio Sires, D-New Jersey,
an original co-sponsor, about why they believe an incentive-based program
is the best option to encourage more states to adopt safer building practices.
What prompted you to become a primary sponsor of the Safe Building Code Incentive Act?
Diaz-Balart: I’ve seen firsthand the kind of destruction and loss of life natural disasters can cause, especially in Florida. During my time in the state Legislature, we instituted a statewide building code and saw a dramatic improvement in the way our homes and businesses were able to withstand these disasters. Florida has led by example, and I wanted to share that experience with the rest of the country.
Sires: I became an original co-sponsor of the Safe Building Code Incentive Act in the 112th Congress because, for me, strong building codes are simple common sense, particularly in areas prone to natural disasters. Following the devastation of Superstorm Sandy in my community, it was a no-brainer to continue the effort of expanding stronger building codes nationwide. Had New Jersey not had the strong building codes in place, the damage from Sandy could have been much worse than the damage that had already occurred.
How have other members of Congress responded to the bill? What challenges have you found in convincing other members of Congress to sponsor the Safe Building Code Incentive Act?
Diaz-Balart: The response has been encouraging, especially with the help and assistance of the BuildStrong Coalition. Once my colleagues realize there is a tremendous opportunity for savings, their interest increases dramatically. Our biggest hurdles have been convincing members that the upfront mitigation costs are worth the long-term benefits it provides and convincing members from districts that aren’t as prone to natural disasters of the benefit of this legislation.
Sires: For the most part, the response has been positive. I think members, particularly those recently affected by natural disasters, are interested in finding new ways to respond to them. As science indicates, natural disasters are bound to increasingly occur in the future, and I think many members of Congress know that simply providing federal funding after a natural disaster is not economically sustainable. A challenge in finding sponsors to the Safe Building Code Incentive Act is to gain sponsors from districts in which the state does not have the enforcement authorization regarding statewide building codes.
Given the evidence that mitigation is effective and cost efficient and the increasing discomfort with taxpayer-funded supplemental bills in the wake of natural disasters, why hasn’t mitigation been more of a focus for Congress?
Diaz-Balart: We are living in a world of increasing concern for our nation’s fiscal health, and it is absolutely correct that the days of free-flowing disaster funding bills are over. I think we all need to do a better job of advocating the benefits of mitigation. Yes, there is an upfront cost, but, ultimately, we reap the benefits in the future and save lives along the way. We know at some point we’ll again be impacted by a natural disaster, so it only makes sense to rebuild stronger and smarter.
Sires: Mitigation is critical in this new age of prevalent natural disasters. It is not responsible to just rebuild the way things were before a disaster. It doesn’t help the victims or the economy. What lesson has been learned if we simply rebuild as things were before? It is imperative in the wake of a natural disaster that affected communities rebuild in a smarter and stronger manner. For that to happen, investment in mitigation mechanisms such as stronger building codes needs to occur. After a natural disaster, the public as well as many in Congress want to see immediate benefits from disaster funding. Funding for mitigation requires Congress to look at the bigger picture and ask if it is worth it to invest now in long-term solutions to prevent future disasters.
Shouldn’t the cost savings associated with building codes be a huge motivation for Congress to enact legislation that encourages statewide adoption of codes?
Diaz-Balart: Definitely. It is one of the main selling points of the bill. According to a Federal Emergency Management Agency-commissioned study, every $1 invested in mitigation activities – such as encouraging the adoption of strong building codes – provides $4 in additional benefits to the nation. Unfortunately, our main impediment has been the scoring of the bill by the Congressional Budget Office, Congress’ official budget scorekeeper. It scores bills on a static model instead of using dynamic scoring where the long-term benefits can be seen. The CBO views the bill as ‘costing’ money because of mitigation costs, it doesn’t ‘score’ the dynamic savings – stronger homes and buildings, the protection of life, and less cost associated with the next storm.
Sires: The cost savings associated with building codes is a huge appeal for members to support the Safe Building Code Incentive Act. Again, it is finding a way for Congress to see the larger picture of investing in mitigation now rather than after a devastating disaster occurs.
Does the Safe Building Code Incentive Act affect the states’ ability to set or enforce building codes in any way?
Diaz-Balart: Not at all, and that is one of the main reasons why I’ve supported it. The bill doesn’t mandate states to do anything; we just provide incentives to take proactive steps.
Sires: No, there is no mandate required in the Safe Building Code Incentive Act for states to enforce building codes. Rather, it provides an incentive for states to establish strong building codes by providing an additional four percent of post-disaster grants to states that voluntarily adopt model building codes and institute the inspection and enforcement mechanisms to validate their codes.
Do you think the carrot approach taken by the Safe Building Code Incentive Act will be more effective than a punitive measure would be for states without adequate building codes or enforcement?
Diaz-Balart: Yes, because incentives encourage states to take practical steps that enhance their interests. Once the Safe Building Code Incentive Act becomes law, some states will see the tremendous benefit when they are rebuilding. At the same time, neighboring states will see that they are missing out on federal investments and will hopefully take corrective action to implement and enforce statewide building codes.
Sires: Yes. Generally, incentives appeal to states more than rigid federal regulations. The Safe Building Code Incentive Act allows for those states already enacting model building codes to serve as an example for those states without adequate building codes. The states without adequate codes will be able to see how benefits from investments in strong codes now outweigh the costs associated with natural disasters later.
Your state enforces strong statewide building codes, so some suggest it is easy for you to support this legislation. What do you say to your colleagues from states that lack either strong codes or the ability to enforce them?
Diaz-Balart: I share with them my personal experience in Florida and my work in the Legislature to pass model building codes. We’ve seen dramatic differences in costs and loss of life since we’ve instituted statewide building codes. A study done for the Insurance Institute for Business and Home Safety found that losses from Hurricane Andrew, which struck south Florida in 1992 and caused more than $20 billion in insured damage in today’s dollars, would have been reduced by 50 percent for residential property and by 40 percent for commercial property if those structures were built in accordance with Florida’s 2004 statewide building code. Another IBHS study following Hurricane Charley in 2004 found that modern building codes reduced the severity of property losses by 42 percent and the frequency of losses by 60 percent.
Sires: Of course, it is helpful that New Jersey has strong statewide building codes when it comes to my views on this issue. I’m here to serve the interest of my constituents and this legislation would be beneficial to my district. I’m proud of the steps New Jersey has taken to enforce strong statewide building codes. As we were pounded with hurricanes two years in a row, I think we are a great example of the success that model building codes can have in terms of mitigation. To my colleagues from states that lack strong codes, I would say, ‘Look at the success in New Jersey or Florida. Learn from our experience and see what can be adapted to your communities.’
Could this issue be one where Congress can set aside its partisan differences and join together to achieve a common goal?
Diaz-Balart: That is what we are striving for. We introduced it with both Republicans and Democrats and have a diverse set of co-sponsors from across the country and across the political spectrum. Natural disasters impact communities regardless of their political beliefs and saving lives and money is a bipartisan priority.
Sires: The Safe Building Code Incentive Act is bipartisan legislation. Natural disasters are not partisan matters. They can happen to any district at any time. The appeal to prevent future structural and economic losses is great for Democrats and Republicans alike.
What else can you or anyone else interested in stronger, safer buildings do to encourage more states to adopt and enforce building codes?
Diaz-Balart: There are plenty of data, factual evidence, and real-world experiences that we need to share to help increase awareness of the benefits of building codes. It is imperative that we talk to our local elected officials about these benefits.
Sires: Simply put, sharing the stories of success in the 16 states that have stronger and safer buildings is the ultimate way to encourage other states to adopt and enforce building codes. New Jersey is a perfect example. While the damage from Superstorm Sandy was completely devastating, matters could have been far worse if New Jersey did not have strong enforcement of model building codes.
You attended the recent roundtable discussion on building codes at the IBHS facility in South Carolina with many different groups represented there. What did you take away from the discussion?
Diaz-Balart: I’m grateful to the BuildStrong Coalition and IBHS for hosting me and several of my colleagues at its research center for a wildfire demonstration and congressional roundtable. The diverse group represented – building and construction experts, insurance industry officials, emergency management officials, and firefighter organizations – demonstrates the widespread support for this common sense legislation. It was amazing to see a wildlife demonstration and the steps that businesses and homeowners can take to protect their properties and lives.
Learn how to become politically active. Contact Irica Solomon, NAMIC's vice president of federal and politcal affairs at firstname.lastname@example.org.
New Campaign Focuses on Directors
Want to get in the game? Find out how your team can participate in the campaign and download the “Hit the Boards” brochure.
While March is the greatest month of the year for college hoops fans, the big tournament in politics – and, increasingly, in business – ends in November. In fact, the tournament has already begun, as candidates look to build support and avoid being eliminated in the early rounds.
NAMIC PAC has recently begun a new “Hit the Boards” campaign, looking for players to join its team and help support those candidates who share NAMIC’s goal of a free and competitive marketplace. The campaign is primarily focused on drafting new players from NAMIC members’ boards of directors.
In business, as in basketball, games are won and lost on the boards. The role of a director is to oversee the function of the organization and make sure it continues to operate in the best interests of all stakeholders. Effective directors are a crucial part of any company’s success, and being a successful director means looking not only at what’s taking place within the company but also at the legislation and regulations that could directly impact the company, its employees, and its policyholders.
Therefore, your board of directors is the team your employees and your policyholders rely on to lead your company to success. And, as with any team, it’s important for each member to do his or her part to ensure the team continues to work toward its ultimate goal.
More than ever, it seems the issues facing the insurance industry are being intertwined with the politics of the day – whether it is the effort to delay flood insurance reforms to keep rates artificially low in an election year or the ongoing effort to build a federal presence in the insurance regulatory arena. Legislators can, therefore, set the tone for our industry.
As leaders, directors also set the tone for others. NAMIC PAC hopes that directors will take on a more active role in the political arena and lead by example to encourage others to get in the game and join the effort to fight off federal intrusion into insurance regulation.
The key to getting our shared voice heard is strength in numbers, and NAMIC PAC provides a means to act collectively. A single contribution to a candidate can only do so much, but pooling personal contributions can establish NAMIC’s strength as a voice for the property/casualty insurance industry and have a true effect on the outcome of the 2014 elections.
It is important to have your team in the game and make sure each player understands the importance of Washington’s decisions. Please take the time to meet with your board of directors and your employees about their participation in the political process. They, too, should be aware of the impact policy decisions have on your company and the value of helping to shape these outcomes. Don’t wait, get in the game.
“Keeping our board members apprised and involved in legislative and political matters is a significant aspect of their corporate stewardship, as they represent tens of thousands of our policyholders. They further understand the critical responsibility and significance of personally being involved in the NAMIC PAC. As such, we have had one hundred percent participation for many years through automatic retainer deduction.”
– Steve Linkous
President & CEO, Harford Mutual Insurance Company
IN Magazine Published by the National Association of Mutual Insurance Companies
The National Association of Mutual Insurance Companies strengthens and supports its members and the mutual insurance industry by its leadership in advocacy, public policy, public affairs, and member services.
John J. Bishop
The Motorists Insurance Group
Stuart C. Henderson
President & CEO
Western National Insurance Group
Paul G. Stueven, PFMM
General Manager & Treasurer
Mutual Insurance Company
Secretary | Treasurer
Christopher P. Taft
President & CEO
Preferred Mutual Insurance Company
New Berlin, New York
Immediate Past Chairman
Jerry G. Zenke, PFMM
General Manager & Treasurer
Mound Prairie Mutual Insurance Company
Charles M. Chamness
President & CEO
IN magazine Volume 100, Number 4
IN (ISSN: 1931-7727) is published four times per year by the National Association of Mutual Insurance Companies (NAMIC), 3601 Vincennes Road, P.O. Box 68700, Indianapolis, IN 46268-0700, (317) 875-5250.
IN magazine strives to inform, entertain, and inspire its audience: mutual property/casualty insurers and those who work with them. IN's articles reveal and explore issues, challenges, trends, and personalities central to the purpose of mutual insurance and related business.
Published articles are intended for informational and educational purposes only and do not replace independent professional judgment. Statements of fact and opinions expressed are those of the author or individuals quoted by the author and may not reflect the opinion or position of NAMIC.
IN magazine is not responsible for or otherwise liable for the content or representations made in any advertisement. We reserve the right to reject advertising that is deemed to not be truthful or in good taste, or which is inconsistent with the mission of NAMIC. All advertising is subject to the terms and conditions set forth in the advertising contract.
Correction of factual error(s) of previously printed editorial information will be published at the earliest available opportunity.
IN magazine welcomes submissions and often assigns articles to freelance writers. Basic criteria for such submissions and assignments include relevance to the mutual insurance industry, timeliness, and quality. Actual publication will depend on space availability. NAMIC will not publish advertorials or articles that promote a single company or its products and services. NAMIC reserves the right to edit any article for space, clarity, and style. For more information on writer's guidelines, please email email@example.com.
Comments from readers are also welcomed and should be submitted to firstname.lastname@example.org. Reader name, phone number, and email address should be provided to be considered for publication.
For permission to reproduce any articles from IN magazine or its predecessor, Property/Casualty Insurance magazine, or to order any back issues of IN magazine, email email@example.com.
Periodicals postage paid at Indianapolis, Ind., and additional mailing offices. Annual subscription rate is $30. Copyright 2013. All rights reserved. Printed in the United States. POSTMASTER: Send address changes to IN magazine, P.O. Box 68700, Indianapolis, IN 46268-0700.
Delegation: A Key to Leadership Success
By Lindsay Robison
People get to management positions because they have done the work. They are used to working hard and putting in long hours to get things done. Interestingly, once people get to management positions, the work they are used to doing is no longer their prime responsibility. Therefore, those attributes leaders have successfully honed throughout their careers to get them to leadership status can become curses to them once they get there.
When people get to leadership positions, “their role is no longer to do the work; their role is to get the work done and to get it done through other people,” says John Baldoni, leadership chair at N2Growth and author of a dozen leadership books. Because they get used to doing the work themselves, it often becomes difficult for them to delegate the work to others. But delegation is a key to a business’ and, ultimately, to a leader’s success.
Delegation seems to be a simple concept, but it is a challenge across business sectors throughout the world. John Hunt, a London business school professor, found that only 30 percent of managers think they delegate well. Those working for them agree – only 33 percent of employees Hunt surveyed considered their bosses to be good delegators. While each leader who has a difficult time entrusting work to others is unique in the reasons why he or she does not delegate well, there are some common explanations.
Control and fear are two of the biggest reasons, and they go hand in hand. A manager’s department is under his or her control, so if an employee makes a mistake, that mistake becomes the manager’s as well. That is where fear comes in. Managers who have difficulty delegating fear that their employees will not get the job done as well or as efficiently as they could have done it themselves.
Another reason is time constraint. When delegating a task that is new to an employee, managers must tell that employee what they are looking for in the completed project. This often leads to the belief that by the time managers relay their expectations and wait for employees to finish their projects, managers could have already completed the task in the way they wanted.
“The problem with that thinking is that the scenario never changes,” says Rick Lepsinger, president of OnPoint Consulting. “The next time around, when you would like to delegate to someone, they are no better prepared than they were the last time. It is a cycle managers must learn to break.”
Breaking that cycle takes some reflection from managers. For those who have a difficult time handing off projects, it might be comforting to think that every piece of a project does not have to be delegated. So while there is nothing wrong with managers completing a portion of a project, they need to reflect on what they do really well and keep only those things for themselves. Entrepreneurial coach Dan Sullivan calls this finding the “unique ability.” Scott Addis, president and CEO of The Addis Group and Addis Intellectual Capital and founder of Beyond Insurance Global Network, is a student and proponent of Sullivan’s unique ability concept, and he encourages managers to look at projects with their unique abilities – as well as their employees’ unique abilities – in mind. Once those abilities have been identified, Addis advises leaders to dole out the parts of the project that don’t fall within their unique abilities.
But successful delegation is not just about handing out assignments. Delegation has a coaching element that allows managers to act as a mentor while also making sure projects are completed on time. Fortunately, this can take some of the fear element out of the delegation process.
Lepsinger believes the best way to do this is to break a complex project into milestones, setting up checkpoints to talk about the progress and add the next milestone until the task is complete.
“Each one of those points is an opportunity for coaching as well as progress review and course correction,” Lepsinger says. “That way you don’t just hand off a task and say, ‘Here you go; tell me when you’re done.’ You can use it as an opportunity to develop [an employee] … and build confidence so that at some point they can be given whole projects.”
Leaders must be careful, though, to not turn checkpoints into micromanagement, which often demotivates employees. “People will simply give up,” says Baldoni, “and say, ‘Well the boss is just going to do it, so why even try?’”
Ultimately, effective delegation can make a huge difference in a company – for leaders and for employees. Baldoni calls the lack of delegation a career inhibitor. “It will hold people back from achieving more senior levels if they do not learn how to let go,” he says. “They will end up overworking themselves and not developing the talents of their people. Delegation should be viewed as liberating. You are putting people in positions to do the work well and empower them, which is your job.
“There is great satisfaction in doing a job and doing it well,” he continues. “Managers must learn to derive energy from having the team do things well, enabling others to do it and take joy in their successes and their collaboration. And that is a result of managers putting the right people with the right resources in the right place at the right time.”
In the end, companies led by people who are good at delegating are more productive. They have happier employees who are more engaged in their jobs and managers who have more time to work on the strategic aspect of their companies that can lead to even more success.
Identifying Unique Abilities
Based on strategic coach Dan Sullivan’s unique ability concept, Scott Addis, president and CEO of The Addis Group and Addis Intellectual Capital and founder of Beyond Insurance Global Network, says every person’s activities fall into four areas:
Incompetent activities, which make you feel frustrated and stressed;
Competent activities, which you can do but might be better completed by someone else;
Excellent activities, which you are good at but aren’t your passion; and
Unique ability activities, which you are excellent at and give you energy.
Addis uses these four areas as evaluation tools when working with clients who want to become better delegators. He asks clients to think about the activities they do every day and group them into the four categories. Once people have found their unique abilities, he suggests managers hold on to those and delegate the other activities.
“Think about it. Your employees should be people who can take something away from you and add to the company,” he says. “Delegation is understanding your and others’ natural strengths and unique abilities.”
Everyone Benefits From Mentoring
By Alaina Sullivan
Not everything can be taught in the classroom and through textbooks. Some lessons can be learned only through work experience, the good and the bad. Mentors can help with those lessons. Mentoring has become a practice used in a multitude of industries, the insurance industry included. Companies across the country use formal and informal programs to mentor employees just coming into the industry. The experience can be beneficial for the mentee as well as the mentor.
For Terrence Baker, product manager with Indiana Farmers Mutual Insurance Company and a professional with 12 years of insurance industry experience, a mentor is a source of information, someone a new employee can reach out to for questions or suggestions. Mentors also provide guidance and encouragement.
What qualities should a good mentor possess? To Baker, a mentor should mirror an educator or coach. “When I think of my good teachers and mentors through the years, they often have the same qualities: leadership skills; developmental skills, meaning they can bring the best out of individuals; guidance toward the correct path, not simply telling you the right path; frank feedback, they will tell you what you may not want to hear; and genuine cheerleading.”
– Terrence Baker
“Like most people in the insurance industry, I just kind of fell into it,” Baker says, “but I was eager to get started and develop.” So when he began his career working at Gresham & Associates, Baker was fortunate enough to connect with his soon-to-be mentor Nancy Werner.
Werner identified something special in Baker and put specific challenges before him to see just how motivated he was. At the time, her department was looking to fill an underwriter position. Baker was one of two people in the office who wanted the job, and he said Werner gave him a couple of trials, including some early-morning meetings, to gauge his interest. His hard work paid off as he earned a position in her department.
Werner’s challenges to Baker show a mentor is anything but a hand holder. Rather, a truly effective mentor pushes a mentee to take chances, to seek opportunities on his or her own, and to work hard for his or her ultimate career goals. Baker said Werner gave him enough room to make mistakes as well as achieve successes.
“She always said that there was no mistake we could not fix and that it was important that we learned from those mistakes and grew from them,” Baker says. “I always felt like she wanted to see me advance and grow. A good boss always wants you to advance past them.”
What qualities should a good mentor possess? To Baker, a mentor should mirror an educator or coach. “When I think of my good teachers and mentors through the years, they often have the same qualities: leadership skills; developmental skills, meaning they can bring the best out of individuals; guidance toward the correct path, not simply telling you the right path; frank feedback, they will tell you what you may not want to hear; and genuine cheerleading.”
While his mentorship with Werner was the more informal mentor-mentee relationship, Baker’s current employer offers a formal program called LIFT, which stands for Leadership Information for Tomorrow. LIFT is a two-year program for which associates must apply and be selected to participate. There are no more than 12 participants at one time. Despite his years of experience in insurance, Baker still considers himself to be a student in the industry. He is in his last year in the LIFT program.
“It is a program sponsored by some of our company executives,” says Baker. “They send participants to various classes and courses in an effort to build leadership skills. There are also mentoring opportunities with those on the executive team. It has been a great program, mainly for professional growth, but also some personal growth. What I have gained from the LIFT program has been invaluable.”
Formal mentoring programs such as LIFT require buy-in from the executive level down. It takes a great deal of commitment, time, and effort to develop a successful program. LIFT has been successful because of the support it has received from company executives and managers.
Some companies prefer new associates not be put into sanctioned mentorship programs, according to Baker. But no matter the company requirements, even just an informal relationship with one of the company’s senior associates can help guide a new associate along the way.
“I can understand not wanting to place new hires into a sanctioned mentorship program,” said Baker. “But true mentorship happens every day from people within your organization.”
Therefore, Baker emphasizes the need for new associates to reach out to more experienced colleagues in their companies for mentorship – like he was able to do with Werner. Even if their employers do not offer a formal program, the experience and support new associates can gain from a mentor is invaluable.
“Mentorship needs to begin day one,” Baker says. “If my mentor had not started with me from early on in my hire, I do not think I would have taken such an interest, not only in insurance but in setting a solid foundation for my future career.”
Mentoring is a continuum, and while you never stop learning, you should also give back to the future of the industry. Baker’s mentor was vocal about the benefits she received from her own mentor, and this philosophy has stuck with him. “Nancy was a unique individual and a great mentor,” Baker says. “It was evident that she enjoyed mentoring people and that stemmed from her mentor in the business. Nancy was always looking for opportunities for me to learn from her knowledge base and experience.
“Nancy understood the importance of paying it forward,” he continues, “and I feel I owe it to Nancy and her mentor to do the same.” Because of this, Baker would like to return the favor and is seeking to be a mentor himself.
“I don’t think you ever stop needing a mentor,” he says, “but I definitely think I am getting to the point where I would like to have somebody I could foster excitement about the insurance industry.”
Leaders Talking to Leaders
By Lindsay Robison
NAMIC’s Congressional Contact Program allows mutual insurance company leaders to talk face to face with the nation’s decision makers
When looking back at his first trip to the nation’s capital to participate in NAMIC’s Congressional Contact Program, Kevin Meskell, executive vice president of Quincy Mutual Group, remembers being escorted from one side of Capitol Hill to the other, taking shortcuts and hidden corridors, and even riding on the congressional subway. Tightened security measures have made these adventures much different, but Meskell continues to participate in the CCP because the program’s intentions have not wavered.
Because there are 535 members of Congress who can ultimately make decisions that impact the insurance industry, it is vital for insurance company leaders to let their voices be heard. Twenty-nine years ago, NAMIC established the CCP to provide an outlet for insurance industry leaders to visit Washington, D.C., for face time with their senators and representatives. It has been providing the opportunity to hundreds of mutual insurance industry representatives ever since.
The meetings with congressmen and congresswomen, like the ways in which Meskell first trekked around Capitol Hill, have changed over the years. Depending on the availability of a state’s congressional leaders, CCP delegates will have varying lengths of time to speak with their elected officials. Delegates might shake hands and chat with members of Congress in their offices, in conference rooms, in meeting rooms no bigger than a closet, or even on the go as they walk from one meeting to another. A Congress member’s staffers might stand in his or her place, listening to what the insurance executives have to say and then relaying it to the respective senator or representative at a later time.
Because members of Congress have hectic schedules, CCP delegates know they have to make good use of their time on Capitol Hill. So while NAMIC staff briefs delegates before every meeting, giving them the issues to cover and talking points for each one, five or six issues might turn into two or three that are especially important in a particular state or to a certain member of Congress.
Meskell says the visits opened his eyes to the number of interests members of Congress and their staffs are confronted with, and he has learned the importance of honing in on the key points. “While we want to promote our positions,” he says, “so, too, do representatives from manufacturing, farming, education, transportation, healthcare … the list goes on.”
Mick Ware, an Idaho native and president and CEO of United Heritage Property & Casualty Company, agrees. “You’ve got to hit the issues hard and focus on the points that are going to hit home and mean something to them,” he says.
But members of the Texas CCP delegation wanted to make sure to get a little extra time with their members of Congress. So in 2008, they put together their first supplemental CCP event, and when meeting with their senators and representatives, Texas delegates handed out invitations to a Thursday evening social get-together. That first year, just a few of Texas’s congressional members and their staffs attended, according to Paul Ehlert, president of Germania Farm Mutual Insurance Association. But attendance numbers jumped the following year when delegates switched the day of the event to Wednesday and added Blue Bell ice cream and Shiner Bock beer to the mix.
“The true drawing card has been the ice cream,” Ehlert says. “Over the past few years, we have had attendance by congressmen and staff members in excess of two hundred. This past year, we even had representatives from other states attend our social.”
Ware and the rest of the Idaho delegation might not host their own outside event, but Ware often attends local functions where his state’s members of Congress will be and makes it a point to speak with them. “I always remind them that I have been to see them in Washington,” he says. “Many of them remember I was there, or their staff reminds them I was there, and they promise to meet with me in the future.”
Despite the sometimes unconventional meetings and fast-paced schedules, it is worth the visit to the Beltway because those lobbying for NAMIC member companies every day see the difference these trips make. “We could send our best lobbyists with the best talking points,” says Jimi Grande, NAMIC’s senior vice president of federal and political affairs, “but that doesn’t mean nearly as much as if someone from home shows up. [A congressman or congresswoman] is going to be more keenly tuned in because he or she knows that person is going home.” Based on how the visitor is treated, it can affect the way he or she votes, and that person will tell others of the experiences and treatment received in Washington.
“That doesn’t mean one vote,” Grande says. “That means a lot of votes. Our members tend to be influential members of their communities, and I think members of Congress get that.”
For Meskell, the trips to Washington are really about two things. First, it shows congressional leaders that the issues the NAMIC delegates bring to the meetings are important enough for them to take time out of the workdays and money out of their company’s budgets – or sometimes personal budgets – to travel to Washington. Second, the delegates can demonstrate how the decisions made in Washington truly affect people back home.
The effectiveness of the visits has become evident to Ware, even though he has only been attending CCP events for a few years. When the insurance industry comes to town, “they know we have an issue,” Ware says. “They know we’re passionate about it and that the entire industry is behind it. Then they know that their constituents are part of this issue.” And by making the trip to Washington on a regular basis, congressmen and congresswomen get to know the delegates and recognize that they are serious about the impacts these issues could have on the industry.
Plus, the voice of many rings louder than any individual one. “Although any of us could individually visit with our congressmen,” Ehlert says, “CCP provides the organizational structure that promotes more of our industry representatives to be involved in communicating a consistent message with their particular representatives. The NAMIC staff has done an excellent job of advocating on the Hill on behalf of our industry, but it is extremely important that we show our support of the positions being advocated. A voice not spoken is never heard.”