Time For Insurance CEOs To Go ‘Undercover’!
Did you folks happen to catch the premiere episode of “Undercover Boss” on CBS Sunday night, after the Super Bowl? It’s about CEOs taking on lower-level jobs in their companies, where they get their hands dirty and see how their operation really functions. I think it would be a great idea if insurance industry CEOs did that at least once a year–on- or off-camera!
Wouldn’t it be great if an insurance company CEO had to go out with adjusters to settle some difficult claims? Or if they had to man the phones for a few days in the Claims Department and deal with enraged claimants?
What about if they had to underwrite and price some hard-to-place accounts? Or go meet with their independent agents (especially if they had to deliver the bad news in person that an agency was in danger of losing their appointment with the carrier if they don’t deliver more business, or are having their commissions cut, or that the carrier is pulling out of a line or state altogether)?
On the agency side, how about principals taking on the role of a CSR for a time and dealing one-on-one with customer problems or questions? Or doing some warm calling on prospects, asking for X-dates to round out existing accounts?
I’m not saying this would make great television, but as a matter of policy, I think it would help educate those at the top by giving them first-hand knowledge of how their operations work in the real world.
Perhaps they would even make some changes in standard operating procedures or working conditions as a result.
What do you folks think of this idea? What other kinds of gigs would you suggest for insurance company and agency CEOs?
Are there any CEOs out there willing to pick up on my challenge and actually do this??? Or better yet, are there any out there already doing something like this? Let me know.
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How about some CEO’s actually getting out and looking at the accounts being written by their underwriting staff and agency plant? I’d bet that would be a real eye opener for some; perhaps too much so in some cases.
I recall many times when especially poor risks were reported to underwriting, and due to “agency accommodation” the underwriter chose to remain on the risk, ignoring reports on conditions, accident investigations, SIU reports, etc. Then, when the huge loss occurred, the CEO wanted to know who was the idiot that wrote the risk, and why didn’t the risk management people do something about this and why, why, why, ad nauseum!
Facts were that the top brass really didn’t want to know about the bad risks out there as long as they brought in premium. Some companies want a squeaky clean book of business and some don’t. Some will overlook almost anything as long as somewhere along the line there is belief that the loss won’t happen on this watch, or in this case, the policy period.
On the opposite side of the coin, I’ve had top management go out with me to see a risk I’ve said was particularly bad business, and then come back and tell the underwriter to send cancellation notice as soon as possible. Then had that order countermanded while the “political football” bounced around the office for weeks, only to have the risk burn to the ground before the cancellation notice ever hit their mailbox. Then the “if only” game starts.
You make a good point, Sam. Having the top brass actually work the field and see what goes on, and what the book of business really looks like would be a great start to their understanding of the overall profitability of the company. Writing a huge book of windstorm business and never standing anywhere near the buildings you’re insuring in Florida is scary at best, yet I can tell you about that scenario. But lets make sure they see the real world and not the squeaky clean risks that give them the warm fuzzies. Let them see the ones that give you the chills, like the explosives plant and the nuclear reactor hidden within a potential policy because nobody knew what was really there. Except the risk management specialist who went out before hand and covered all the bases. Whew!
Spectacular idea and a fantasy. In reality a CEO would have to send a surrogate wearing a hidden camera & microphone to see the real deal. But reality and this fantasy the twain shall never meet.
Sam,
I actually watched “Undercover Boss” longer than I watched the Super Bowl (I am more of a college basketball fan, Go Jayhawks!). That show really caught my eye. After initially being moved by the “Bosses” change of heart, I came to believe that he was, at a minimum, being disingenuous if not completing pandering to the cameras. I don’t know much about the garbage business but his overall lack of understanding of what his employees do on a daily basis makes me wonder if that executive could have possibly worked his way up through that industry or perhaps that “boss” came from a different industry before joining Waste Management.
I do not mean to be a cheerleader for the insurance industry but from my years as a retained executive search consultant working in the insurance industry I have noticed that the overwhelming majority of senior level insurance executives did come up through the ranks and therefore, they have a deep understanding of what the rank and file do to make the company go. I do not want to say that the insurance industry is an apprenticeship but there are similarities. For example, to be a Chief Actuary you have to spend years in an actuarial program, same thing in the claims as well as the underwriting functions. Even the Chief Financial Officer of an insurance company must have a specialized financial focus in insurance. (To be a successful CFO in an insurance company you must, at a minimum, understand statutory accounting and have a solid grasp of actuarial principals. You can see how non-insurance finance executives struggle with these complex concepts.)
Therefore, I believe that insurance industry executives, maybe more than other industry executives, would do a pretty good job going “undercover.” Unlike other industries insurance executives have a unique understanding of what mid-level and entry level employees do. There are always exceptions to the rule and yes, people become arrogant, forget where they came from or just get plain lucky to land an executive role. But at the end of the day most C-level insurance executives really understand what is going on in the trenches. As for riveting television I am in complete agreement with you; I would grab my remote and change the channel PDQ!
I would do it if I were CEO, but as worker bees, we know who our CEOs are. It would be hard for them to come in and pretend to be someone else, right?
SAM RESPONDS:
Good point! But I think just as an exercise, rather than for the TV cameras, such a step might be very useful–even help boost morale that the CEO is getting down into the trenches with the front-line troops!!!
About 35 years ago, Jim Corcoran became the new CEO of The General Accident, USA Division. His first weeks there were spent undercover as a new private passenger desk underwriter in their Penn General Insurance Division within the Home Office in Phila.
No employee below VP or Regional Manager knew who he was or that he wasn’t simply a new hire. Jim went there because this preferred auto company was experiencing a huge turnover in employees and loss ratios were in flux.
As a young field rep I responded to an agent’s memo from him by phone and questioned his experience and knowledge of how we transacted agency “accommodations” when necessary. Hours later my manager asked to see me and revealed who Jim really was.
I thought my career might be over. However, Jim asked to meet with me and the next few days were most interesting. We met and became life-long friends. He learned what he needed from me and others and turned that division around. His tremendous success at GA is now history. We need more of this action now.
Sam, I thought that your view on CEOs going undercover was an excellent idea.
I was a branch manager at Fireman’s Fund for many years. We had a tradtion that to support the United Way, each year we would pick one day when everyone had to switch jobs. Kind of like a Sadie Hawkins day.
I took turns as the switchboard/receptionist, a commercial lines rater, a claims adjuster etc. It was an extremely useful experience for all.
Sam, I thought that your view on CEOs going undercover was an excellent idea.
I was a branch manager at Fireman’s Fund for many years. We had a tradtion that to support the United Way, each year we would pick one day when everyone had to switch jobs. Kind of like a Sadie Hawkins day.
I took turns as the switchboard/receptionist, a commercial lines rater, a claims adjuster etc. It was an extremely useful experiencxe for all.