Newsletter Sign-up

By CYRIL TUOHY, managing editor of Risk & Insurance®. MATTHEW BRODSKY, senior editor/Web editor of Risk & Insurance®, contributed to this story.

(To read the full profiles, please go to the 2009 Risk Innovator^TM page and click on the 14 industry categories. Please also check out the listing for the special Responsibility Leader® designees.)

Chubb's point man on innovation is Jon Bidwell, who was appointed chief innovation officer in August of last year. Bidwell has a long history at the company, having run the financial institutions underwriting unit there for many years.

He started with Chubb more than 26 years ago, and his memories of his former life as a line underwriter remain vivid. If his department didn't constantly innovate in response to the changing needs of customers, it would cease to exist.

Zurich, which recently created the position of chief innovation officer, appointed Ty Sagalow, a long-time AIG manager, to head the company's innovation initiatives.

Like Bidwell, Sagalow spent more than two decades in the industry. Innovation matters, Sagalow said, because it often means the difference between corporate life and death.

"Whether it's refreshing an existing product to anticipate or respond to new customer needs, or creating a whole new insurance proposition, innovation plays the critical differentiating element," he said. "In essence, you need to constantly innovate or die."

With all the how-to innovation manuals sitting on managers' shelves and all the latest "McKinsey Quarterly" metrics on how much value innovation actually creates, it's worth asking the following questions: Who's doing all the innovating in the risk management space? Who are the men and women responsible for keeping their companies alive? Who's responsible for creating all this value so dear to customers, shareholders and management?

Turns out, it's the corporate veterans. The kind of insiders who are doing a lot of the work are people like FM Global's 73-year-od Archibald Tewarson, an expert in the specialized field of fire retardants and physical chemistry.

Originally from the Indian province of Uttar Pradesh, Tewarson immigrated to the United States, earned a Ph.D., and devoted the rest of his professional life quietly looking into ways to slow the spread of flames by developing fire-retardant plastics.

His research was sometimes slow and plodding, and at other times in his career it came in spurts. Either way, the odds are that, if you look hard enough, you can find Tewarson's work hidden deep in the kinds of plastics used in an array of products, from airplanes to children's toys.

Just to underscore what kind of insider we're talking about here, Tewarson's spent his entire professional life at FM Global.

Another innovator who fits the billing of the industry insider is Robert E. Keller, vice president of compensation, benefits and safety with Indianapolis-based Norwood Promotion Products Inc.

With 2,000 employees at six manufacturing plants, Norwood is one of the largest promotion products companies in the country. The company, it has been said, has the distinction of being the world's largest purchaser of Titleist golf balls.

Keller, a 59-year-old veteran of compensation and benefits programs at General Electric, General Dynamics and R.R. Donnelley, has been in the industry for decades and the results show.

Before Keller's arrival, average per-employee compensation losses in 2005 at Norwood were running at about $625, with injured workers collectively spending as much as 838 days away from work due to injuries.

Last year, average per-employee costs came to about $107, with the number of work-related injury days racked up by workers totaling 51. The reason for the difference? Keller and his ability to innovate and execute.

Or take Lisa Byrnes, vice president of Knoxville, Tenn.-based Regal Entertainment Group. She's been with the company since it started out as Regal Cinemas in 1990, and as any colleague will tell you, she is one of the best-known executives, employees for that matter, in the organization. Her focus on safety has become the company's focus.

So when new stadium-designed theaters opened up a whole host of expensive exposures, Byrnes was the go-to woman. She's come up with blockbuster ways to mitigate the new risks, including her strict and quick claims management policies, extensive companywide training and specially designed theater renovations. Only she had the industry contacts, risk management know-how and corporate clout to pull this off.

Insider status, of course, applies not just to the private sector, where genuine innovators often have and need more than 20 years of industry experience before contributing any real innovations, but to the nonprofit sector as well. There is rarely anyone more deserving of insider status than local police officers.

Ministering to risk management and loss control among the nation's churches is Bob Chauncey, a deputy sheriff and police chaplain with a decidedly entrepreneurial calling, who saw a need to protect churches.

Despite their "safe haven" status within society, churches, mosques, synagogues and other places of worship are not immune to violence, and the shocking murder of Dr. George Tiller in May reminded us of it.

Tiller, one of the few practicing late-term abortion doctors, was gunned down in the foyer of the Reformation Lutheran Church in Wichita, Kan., where he was serving as an usher.

For Chauncey, principal of the Church Security Institute in Virginia Beach, Va., every church in the country needs a risk management plan, and it is his belief that he should be the one bringing it to them.

His approach is based upon his background, made up of a mix of criminal justice, law enforcement, general and commercial insurance, security protection, surveillance, risk analysis and loss prevention, and serving as a chaplain.

"I'm meeting a need that I didn't see companies addressing," he told Risk & Insurance®.

By now, the pattern should be clear: many of the most innovative people in the risk management and insurance space are its veterans, men and women with 20 or 30 years or more of experience, many of whom have advanced degrees.

This is no coincidence. For every young college graduate brimming with enthusiasm and new ideas, there are scores of industry veterans who have worked for years, sometimes on just one problem or research area for little immediate personal or financial reward.

Innovations are as likely to spring forth from long years of research and study as they are to appear in a blinding flash of light while lying in bed on your day off, according to Lou Gritzo, vice president of research for FM Global.

"The best ideas are rarely revelations that appear out of the blue. They are inspired by needs that can't be met with the status quo," said Gritzo. Chauncey probably couldn't agree more.

SPEED AND EXECUTION

No innovation is complete without the ability to execute. Innovations that sit on a shelf, or marketed just for the sake of innovation, will in the long run sink a product, a service, even an entire company. "The biggest barrier in the insurance business is not ideas," said Bidwell. "It is the will and means to execute on them."

Here again, insiders are often the ones most capable of seeing these innovations through to fruition. Insiders are, after all, those most familiar with the workings of their respective enterprise--whether it is a single cubicle, a department, an overseas office or the entire company.

Insiders are in the best position to push the right buttons, join the most effective internal network and cultivate middle manages most receptive to moving an innovation up the chain of command.

Outside consultants can offer their help, but that help often only goes so far. In the end those on the inside must be the ones who make sure innovations see the light of day. Risk Innovators profiled in this issue are insiders--one and all.

Probe deeply enough, and we're certain every innovator has a story about butting heads, cajoling colleagues, even storming out of offices in a fit of disagreement, all in the name of wanting to improve their organizations.

"The 'idea people' are critical. They have the ability to break away from the norm with new ideas and concepts, but additional skills to achieve development and take the work to the finish line are key to innovation success," said Gritzo.

Speed, for example, matters. When William (Bill) Diaz, president of CS STARS, Marsh's widely used risk management information system, was appointed president of the division last September, it was only five months before he had something to show his clients.

Diaz, who had previously worked at CS STARS before moving to the Marsh broker side, unveiled at a users' conference last March a new feature akin to Google Maps, to help risk managers analyze and interpret their data.

Risk managers, who had heard of the coming upgrades, were impressed at the speed with which the Diaz team had acted. "Some of these clients were blown away, and by how quickly we intend to move forward," said Diaz.

Once again, an insider, Diaz, with a deep understanding of his company, Marsh, had climbed through the ranks to a leadership position. Once there, he helped shatter the status quo and upend the expectations of his customers.

"It's a rare customer that says I want an innovative company," said Sagalow. "What they'll say is, 'I want a company that meets my needs.' What I say back is, 'I'll meet your needs before you even know what your needs are.' "

(To read the full profiles, please go to the 2009 Risk Innovator^TM page and click on the 14 industry categories. Please also check out the listing for the special Responsibility Leader® designees.)

September 15, 2009

Copyright 2009© LRP Publications