Editor's note: In April, Steve Pozzi, senior vice president and chief underwriting officer, Chubb Commercial Insurance; Donald J. Pickens, executive vice president and chief underwriting officer national markets, Liberty Mutual Group; and John R. Glancy, chief underwriting officer, XL Insurance, sat with
Risk & Insurance® Editor in Chief Jack Roberts to discuss the state of underwriting today. As part of the wide-ranging discussion, the underwriters talked about the state of talent recruiting in the industry. An edited version of those comments is reprinted here.
Editor: Veteran underwriters are retiring and there's going to be a need for more underwriters. Have you seen people leave?
John Glancy: I see them staying. I also see a greater depth and breadth of talent with the younger people that we're bringing in, compared to the old days where you were marching out the B.A.s and B.S.s. We're competing in general with the capital markets for talent. There might be more movement within companies than in the past, but I haven't seen a bunch of people leave.
So what are you looking for from underwriters coming out of school today?
John Glancy: Basically I'm looking for brains and guts. Over a 162-game season, talent wins. If you can accumulate the best talent--and that includes not just the people who do it but the coaching, the mentoring, the helping them along, the teaching and the training--with that, talent wins. It may not win in any one market at any given time, but it wins in the long run.
Editor: Is the talent broader now than it was 20 years ago?
Don Pickens: We're actually looking for broadness in our underwriters when we go out and try and find good, young talent. I've been in this business too many years now, but it's become much more complex than when I first started. One of the fascinating things and one of the reasons why I'll always be passionate about underwriting is it goes across just about every function and discipline within a business environment.
So when you start to explain to people all the things that you are going to be doing as an underwriter, I think they naturally are drawn to it because, at the end, they are going to be pretty darn good business people with a multifunctional breadth of experience.
The industry has done a significantly better job of making itself attractive. We have so many people that started off as actuaries but are now in the investment end of the company. Others started off as underwriters and want to remain underwriters. They don't want to be managers, they want to underwrite risk and that's terrific. We have other people that started off as marketers or claims people. Now they are running underwriting organizations. So we've done a better job at explaining what opportunities are available.
We're a bit of an aberration, I guess. We have a number of people who've been with the company 25 or 30 years. In addition to talent and brains, we're looking for people who are good jugglers. What we've tried to do is make sure people are flexible, have good gut instincts and can work well with people.
So, we find that those people who genuinely care about what they do, like what they do and are not asking every three months, "What's my next job, and how do I get this next promotion?"--invariably those people who are in it for the long haul. They build a relationship. You can use them in a lot of different places, and it makes the whole team a little bit better. I've never been on a good team where you have 43 quarterbacks.
Don Pickens: It's important for all of us, and we certainly do it at Liberty, which is when you're bringing your people through, we do an extensive analysis of their skill sets and we do look at folks we think have long-term high potential. We do rotate them around into different business units and different businesses and distribution channels. The more exposure they get to that, the more likely they are going to be in a position of assuming significant general management responsibilities.
Editor: So how are you competing against the capital markets and the investment banks for talent?
Don Pickens: The key is to get them in the door because, once you get them in to chat with you, I think you can explain it to them pretty well. There's probably a public relations issue with insurance in general. It's not necessarily underwriting because I'm sure there's some M&A underwriters out there that have lines a mile long for people wanting to do their job. But most people don't look at insurance the same way they look at other financial institutions.
As time goes on, maybe that will change a little bit with what's going on in the marketplace today. But I think it's getting out to the colleges and working that pretty hard to get the general interest. And if you start to explain what underwriting really is, which is the risk identification, the risk selection and risk assessment and pricing, I think folks generally would like that as a career choice.
You underwrite the talent almost like you underwrite the accounts. You know what the company's about, you know the type of people who fit in. Other people would do well in any of our companies, I think. And you do try to be realistic. I think probably also you do look for people who do like change and deal with it pretty well. My guess is I'm too old, but had I been young and brought up now, I'm sure I would have been on Ritalin because they would have considered me with attention deficit disorder. You bounce around and do so many different things.
John Glancy: I started with Aetna. They built a hotel to just host their training classes, and you went there for six months to be trained. Our customers won't allow us to do that anymore. They won't pay for us to train new talent. Fortunately, there has been a significant growth in excellent college programs. Not only the College of Insurance, but Georgia, Florida State, Drake, that have created an interest in our business that wasn't there before. There are some excellent, attractive college programs, and that's helping.
Chubb was one of those companies. Not only can companies not afford it anymore, but the folks coming out of school won't sit for it. One of the things that we've had to do is adapt. When we have interns in, it's amazing how you're seeing them instant messaging to friends someplace else and still getting their work done. Twenty-five years ago, we would have been yelled at to get back to work. Now it's how things get done. They are better multitaskers than we were, so you really have to adapt to how they learn and therefore how you teach them.
Are there any other issues with the new generation?
All of our companies are global, and there's a different management challenge in training, setting employee expectations, defining career paths for employees, especially given the diversity we have. I have an office in Paris that's like the U.N. in terms of many nationalities represented. All of them speak at least three languages, and, well, I don't have an office in the U.S. where four people speak two languages. It's just a different dynamic and a different challenge that we all face. And I need that skill level in Europe because of their cross-border work compared to the U.S.
As well as for the individual. As Don said, you pick your high potentials and you try to find those opportunities.
In some of those places, we've been there for 50 or 75 years, and it's the second or third generations now where it's all the native people of that country running the office. We have a number of branches that have very few if any Americans in there, yet it's an American company.
Now, you bring them to the United States, and they think that's great because that's where the company is headquartered and they can see how things work in some of our domestic branches. So we're at that stage now where it's coming back the other way--we have employees from outside the United States working here.
You talk about adjusting to the difference in the people, but I'd say the first 10 years of my involvement in the business I didn't know anybody who went over to Europe. My daughter is 24 now and has lived there for two years. By the time she was 14, she's been to Europe perhaps 15 times. It's just a different environment. If you would have said 10 years ago, "OK, well, we're opening up an outpost," it was tough. Now you find you've got people raising their hands, "I'll go to Germany for two years" or, "I'll go to London."
We've touched on how many of these Generation Y folks operate, and they are a little bit different. They need recognition and lots of challenges, and they do need to see diversification because they want to feel engaged and that they are moving in their careers. But one of the harder things I've tried to think through, and it's different with each one of them, is there's not a lot of patience there either. You do need to spend more than six months in London to learn the London market.
JACK ROBERTS is editor in chief of Risk & Insurance®.
July 1, 2008
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