Hamilton USA CEO Seraina Macia delivers keynote address at APIW/CPCU Luncheon
On January 11, 2017 Hamilton USA CEO Seraina Macia delivered the keynote address at a joint luncheon of the APIW and the New York Chapter of the CPCU. In her first public speech since being appointed CEO of Hamilton USA, Seraina Macia told almost 200 attendees that management of a multigenerational workforce may be the true industry disrupter.
The text of Seraina’s keynote address is below.
January 11, 2017
The Roosevelt Hotel, New York City
Seraina Macia, Chief Executive Officer, Hamilton USA
No Time for Comfort: Insurance in 2017
Thank you, Barbara, for that lovely introduction.
Good afternoon, and Happy New Year.
It’s a pleasure to be with you today and to have the honour of speaking to this joint meeting of the APIW and the New York Chapter of the CPCU.
Before I start, I would like to offer my congratulations to the APIW for celebrating 40 years of service to the advancement of women in insurance. This is a real accomplishment, and I know the women here today – and perhaps some of the men, too – have benefited either directly or indirectly from the important work you do.
Today, I’m going to cover three things during my talk.
The first is some information about my career. It’s not my style to talk about myself, but I’ve been told there’s a lot of interest in what I’ve done and how I came to hold the position I have at Hamilton USA. So I’ll give you some of the insight I’ve gleaned over the years.
The second is the subject of technology. I know that all of us are constantly inundated with stories about the Internet of Things, big data and the like, but I have a few observations I would like to share with you that you might find interesting. They are driving the strategy that my team and I are putting in place at Hamilton USA.
And third is the 21st Century’s multigenerational workforce. We can’t underestimate the challenges and opportunities of managing employees that, in some cases, span five generations of skills and experience, and I believe it’s worth some attention and comment.
First, a little about me:
As Barbara noted in her very kind introduction, I’ve been lucky enough to work for some of the best and most highly regarded insurance and reinsurance companies in the world. I have also been blessed to work for some great leaders in our industry.
I am forever grateful for the opportunities presented to me at AIG, XLCatlin, Zurich, Swiss Re and Credit Suisse Group through my involvement in their Board.
I have often been asked what helped me to rise to more senior levels in the industry and I can tell you that there is certainly an element of luck.
That said, throughout my time at each of these companies, having the courage to step outside my comfort zone was a constant and common thread.
I remember when I was working in Zurich’s Investor Relations department as a senior IR officer, my manager was moved to the US and they needed a new head of Investor Relations & Rating Agencies. This was during a difficult time at Zurich after the share price went from almost 1,000 Swiss francs to below 100.
Zurich asked me if I was interested in leading the department, but I said no because I didn’t have the confidence or the courage to take on such a big role. I just didn’t feel entirely ready for it. Another factor at the time was that I was pregnant with my first child and I wasn’t sure whether I would stay home or work part time, which was the norm in Switzerland.
To cut a long story short, I regretted that I didn’t trust myself enough to take that chance.
Ironically, the person who DID take the job was terrible at it, which made me feel even worse. When the opportunity came around again, I didn’t hesitate.
This time I had learned one of my most important lessons: If you want to take advantage of opportunities to build your career, be courageous and learn to be uncomfortable.
The best roles are the ones that push you out of your comfort zone and that you can grow into.
Another example of being outside my comfort zone was when I was working for Zurich in the US as CFO of their Specialty business, and I was offered the position of President.
As luck or fate would have it, I was seven months pregnant with my third child. Perhaps this is also a theme in my career?
This particular opportunity represented a significant leap forward for me, career-wise. I would be leading a $2.5 billion division – a big difference from CFO to CEO. I admit that I wondered if I was ready, and if this was a wise move. But by this time, I had learned that circumstances are never perfect. If you wait until all the stars align, valuable chances to grow and develop will pass you by.
So I took the job, and it proved to be career-defining, as I now had significant responsibility for a P&L.
There are many aspects of being a leader that seem daunting at first. I was out of my comfort zone in both of these examples, but in both I learned to trust that I could do the job.
I learned during those early leadership experiences to have the courage to be myself, so my second leadership lesson is that you are best when you are authentic. However, keep in mind that female leaders think and lead differently than our male counterparts, and we are often judged more harshly for behavior that is accepted as a matter of course by men.
This can feel uncomfortable if you are sitting around a table with male colleagues debating an issue and you have a different perspective, but you are debating with yourself: “Should I say something or should I just let it go?”
Well, of course, the answer is “Say something!”
Women are plagued by feelings of inadequacy. It’s one of the greatest obstacles to our success. Men don’t seem to suffer from the same insecurity. There’s a wealth of research that underscores men’s inherent belief in their ability, and an equal amount of research to explain why this is so.
But there’s nothing to indicate that this is genetic or hardwired into our female DNA.
We may be our own worst enemy!
These are just a few examples of events that were definitely pivotal in my career. Based on my experience, if I were to sum up what it takes to be a CEO, I’d say this:
- Get out of your comfort zone and accept opportunities that come your way.
- Get P&L responsibility. (without P&L, it is hard to qualify for a CEO job)
- Be authentic. (That’s how people trust you and follow you)
- Last, but no means least, and I didn’t really speak about this that much: Having a sponsor – someone who is willing to take a chance on you – is important in a still male-dominated world.
Talking of sponsor, one last comment on this topic:
As you climb the ladder, don’t forget to send the elevator down and help the women coming up behind you. Sponsoring other females, mentoring and coaching are our collective responsibilities.
And as you assume a leadership role, remember that you have the opportunity to effect change in employment practices that will ultimately benefit any organization you’re working for.
On to my second subject – technology.
I’m not going to bore you with statistics that prove we’re living in a digital age. This is old news. Even for those of us who haven’t been ‘bathed in bits’ since we were born, it’s apparent that we’re living in an age where data is the new currency.
For years, our industry has been ruminating over the impact of big data, and data science, and predictive analytics. We’ve been wringing our hands over the threat of disruption that technology represents.
This ongoing commentary reached a crescendo of sorts during 2016. We have new start-ups every day; there is the emergence of ‘InsurTech’; and artificial intelligence and machine learning are becoming more and more sophisticated. It’s clear that the time for talk is over.
2017 will be the year of action. Actually, it MUST be if we’re to survive in the data-driven world we’re living in.
At Hamilton, we believe that the person with the most information wins. We have an unshakeable belief that leveraging technology and data science is the passport to building the insurance company of the future. We are working very closely with one of our key investors – the principals of Two Sigma. Two Sigma is a technology company that uses a variety of methods, such as artificial intelligence and machine learning, for its investment management strategies. They’ve created a special division to work on opportunities to apply what they have learned to the insurance industry and specifically to risk selection.
We believe that the underwriting process can be improved for all types of risk through the informed application of data science and predictive analytics.
This shouldn’t be taken to mean our underwriters and brokers are doomed to extinction. Far from it.
The role of the underwriters may change and, at the lower end of risk spectrum, individual risk underwriters will become more portfolio underwriters. For the larger risks, the more experienced analysis of an underwriter is still needed.
As for agents, and brokers, the insurance industry is, to a large extent, relationship driven and still is intermediated. As long as insureds find value in their brokers and agents, we will make sure our partnerships are nurtured and sustained.
But with a 30-40% expense ratio, our industry is a strategic anomaly. Can you think of any other sector that would tolerate acquisition costs like ours? And with low to no interest rates, and depressed terms and conditions, there is virtually no other route to profitability than through significant expense reduction.
Technology will help to achieve this expense reduction through efficiency improvement programs and automation. Data science will sharpen our risk selection process. This is a win-win for any company who embraces what the digital age is offering.
Let me give you an example of what we’ve done in this regard at Hamilton USA.
We have developed a mobile-friendly platform that rates, quotes and binds a business owner’s policy (or BOP) in just a few minutes. It is currently called MyHamiltonExpress but will be rebranded to MyAttuneExpress when it’s launched in the next couple of weeks on the Attune platform [which is our JV with AIG and Two Sigma].
There are an increasing number of platforms out there that allow agents and brokers to quote and bind a new piece of business within minutes.
But what is unique about MyHamiltonExpress is that it underwrites business using purely external data; there are no underwriting questions. All the agent has to do is confirm some pre-filled underwriting information and select the type of coverages available.
Today, we use MyHamiltonExpress with a select group of agents who are as committed as we are to using data and technology to taking the hassle out of issuing BOP policies.
The platform actually captures the data the agent inputs as well as external data we have collected, and provides that information in an ACORD format for the agent’s own technology purposes – all in a matter of minutes.
What we’re learning from MyHamiltonExpress is informing the development of small business products. It’s a great example of how data and analytics are changing the role of the underwriter. And as we build out the rest of our US platform, the same approach to leveraging data science will be applied.
We were able to focus on MyHamiltonExpress’s development because we aren’t saddled with legacy systems and cultures. Because of our start-up mindset and commitment to redefining the insurance paradigm, we were able to make continuous improvements, almost in real time, as we rolled out the platform.
This isn’t so easy to do at a company where its corporate culture and way of doing business have been developed over decades.
Many of you who work for well-established carriers will know what I mean. This isn’t a criticism; it’s to be expected that as a company grows, the way it runs its business becomes codified. Behaviour begets culture, and culture begets the norm. If the corporate culture hews to quarterly returns, particularly in a public company, there’s motivation to maintain the status quo.
M&A activity adds another layer of complexity to the challenge of being innovative in a legacy company. It’s been said that the number one obstacle to successful integration is assimilating cultures. Often, this is where integration falls apart.
Ultimately, today’s carrier has to be nimble, responsive and client-focused. There must be a hunger to explore the most efficient way to assess and price risk and support at the highest level to do so.
I think the reality of the digital age may mean that the essential disruption in our industry lies in how our companies are managed and lead, not in the manner in which technology will upend process.
Which leads me to my third and final subject- our multigenerational workforce.
Isn’t it remarkable that, in many companies, there are five generations represented? If you count interns, there could be six.
There’s the generation born just after the Second World War. The senior statesmen and women at the top of our industry are a part of this generation. In the context of making decisions that leverage technology, they are digital immigrants.
Then we have the first wave of Baby Boomers, followed by the second wave (I’m part of that second wave). We are a bit more informed about technology, but most of us aren’t fluent.
Then there’s Generation X – often called the ‘lost’ generation. These are the ‘latchkey’ kids who, according to those who chart demographics, navigated daycare and divorce at higher rates than preceding generations. These employees are technologically adept but again, they weren’t born into a digital world.
Gen X is followed by the Millennial Generation. With almost 80 million Millennials in the US, this is now the largest demographic in the country. Did you know that soon the majority of today’s workforce is made up on Millennials? Projections say that by 2020, half of the global workforce will be Millennials.
These young people are digital natives and are perhaps the most researched generation we have. I love one of the descriptions of Millennials that I read recently:
“They want purpose; they want to make an impact; they want free food; and they want bean bags.”
Seriously – these employees expect flex time, generous maternity AND paternity leave, open-style offices, and a rewarding job that helps them lead a purpose-filled life. They are the most diverse workforce and look for opportunities to work with and for colleagues who look like they do.
Everyone is taking notice of Millennials – even Hollywood.
How many of you have seen the movie The Intern?
It’s a humorous and, at times, poignant look at the generational differences in many of today’s offices.
For those of you who haven’t seen it:
Anne Hathaway runs a successful online clothing company. Robert DeNiro is a retired businessman who wants to get back into the workforce to keep himself busy. But no one is hiring ‘seniors’ and he ends up getting a job at Hathaway’s company as an intern.
Suddenly, this very proper gentleman, with his tailored suit, briefcase and old school manners, is thrust into the Millennial culture of hoodies, iPads and virtual reality.
There are some predictable plot twists and turns, but the movie paints a pretty accurate picture of how tricky it is to meld the valuable business experience of a digital immigrant with the corporate innocence of the digital native. It’s a challenge that almost everyone running a business today faces.
In the US, this multigenerational tension exists against the backdrop of a talent crisis in the insurance industry. By 2034 – just 17 years from now – 50% of our current industry workforce will retire.
But their numbers aren’t being replaced by Millennials, who see a career in insurance as boring and pointless. Research indicates that less than 5% of high school students and undergrads consider insurance as an exciting career choice.
For those of us working in the industry, the fact that it’s seen as pointless is staggering.
I know I don’t need to tell any of you how purposeful our industry is. Nothing works without insurance as we touch every element of human endeavor. The essential promise we make to our customers is to protect them when something goes wrong. We enable recovery. We offer hope.
Millennials should be clamoring to work in insurance.
Clearly, we’ve done a terrible job in marketing ourselves to the younger generations – particularly now, when the skill set we require is so grounded in technology. We need data scientists, software developers, e-marketers – the list of tech-based jobs is a long one, and represents endless opportunity for today’s and future generations.
The good news is there’s now an industry-wide initiative, called the Insurance Careers Movement, that aims to raise awareness of the opportunities in the industry and energize recruitment efforts. The Institutes is one of the founding partners of this effort, so I know the CPCU is very active in making sure it’s a success.
Brian Duperreault is the executive lead in the Insurance Careers Movement. A Town Hall Brian hosted in December with other industry CEOs attracted over 2,000 participants from 10 countries, which we all feel represented an important tipping point in establishing the momentum needed to address the talent crisis.
So, here we are, 11 days into a new year. In addition to the relentless march of technological change and the pervasively difficult market conditions, we are navigating a profound evolution in our workplaces.
These are complex issues with no one-size-fits-all solution. Not for the faint of heart.
But have any of you ever settled for the easy route to success? The chance to do something new and different is thrilling. We can effect meaningful change in our industry – for the people we employ and for the clients with whom we do business.
And if you accept that there is purpose in every policy we write, and every claim we pay, you must be as excited as I am about what 2017 has in store.
In closing, I want to thank you for your time and attention this afternoon. As I said, I have enormous respect for the work of the APIW and the CPCU, and I know that you are two of the forward-thinking organizations that will help ensure the insurance industry survives and thrives in the 21st century.