I rarely comment on an article but feel compelled to do so on this one. Wallace your insight into the insurance business is right on the mark. I am looking forward to the other two parts of your commentary. Thank you for sharing your observations and reflections.
I could not express your observations and insight any better..For years I have been lobbying for the value of “good” people & that you cannot acquire experience and business savvy thru programed learning texts and seminars..They need to be developed on going with daily interaction of customers both external & internal and an attitude of pride and personal ownership must be promoted & practiced daily and talented people treated as “assets” rather than “expenses”..Good experienced and self motivated people need minimal supervision and are the true producers of profit/growth revenues…Our industry is saturated with high cost management that tends to inhibit independent thought and quality work & people development …Right On !!!! You will be missed by some…
I too started in the early 60’s and am retiring at the end of this year. It’s kinda scarey to think about nothing but sitting on the porch drinking brown stuff all day long and possibly going fishing occassionally. Guess that’s why somebody invented the occupation of consultant!
Great reflections and am looking forward to the next two installments.
Wallace, I have only been in this business for 30 years and know less about it now than I did when I started. Regardless, it has always amazed me that as an industry we have never been able to “fix” our fundamental problem of shortsightedness.
Most company personnel are trained to look at a calendar year as some sort of race to be won. Branch managers are more income statement than balance sheet oriented, but the balance sheet is where the carrier’s viability lies. We are an industry of sprinters trying to run a marathon.
We disagree perhaps on the use of technology as I am a staunch supporter of automating routine functions, not to mention that I can’t find anyone with dictation skills, much less manual experience rating abilities! However we agree completely that qualified, loyal personnel, both young and less young, are the glue that keeps a company together.
In most societies the elderly are revered for their wisdom and mentor the younger people. In most trades there is an apprentice system. While it is true that younger people learn quicker and adapt to change faster than older people, they lack the wisdom that comes with experience. Your idea of a transitional period between employment and retirement is an excellent one all businesses would do well to embrace.
If there is a drawback to technology it is that it has only been in the last 20 years or so that we have abandoned the technically proficient in favor of the technologically savvy. When the PC becomes as reliable as an IBM Selectric and network administrators share the same status as the office supply clerk, which will probably happen, we will have to re-evaluate the relative importance of every employee and arrive at a better balance between traditional and emerging skills.
Good luck with your personal transition and thanks for your years of service to this great industry. I look forward to your next installment.
I’ve known Wally Smith for eighteen years and I consider him a good friend, an honorable man and a silent leader. So I know he won’t mind me sharing a disagreement I just now discussed with him.
You can’t stop the inertia of technologically. Yes, it has not always lived up to many of its promises, but it has revolutionized the way we do business for the better. Pad and pen became manual typewriter, which became electric, which became word processor. The Internet has opened avenues of process improvement that are too tempting NOT to spend time and money on. E-mail is excessive, but is invaluable if wisely used. I know, we should step carefully, but we should always go forward.
Regarding Wally’s comments about people, nobody knows how to treat people better than he does, or how to get the most out of them. Mr. Smith is that rare breed of executive people respect for what he believes in. He will be missed.
Very thoughtful commentary. For those of us who deal with his company, National Grange Mutual, we can more fully appreciate his comments. NGM seems to value its people, know what is does and does it well. It leads with technology in a very proficient manner. I have always felt it was a shame that most of the other carriers didn’t follow NGM’s model.
Overall, this was a great article. However, Mr. Smith did not focus enough on actual business processes, reengineering and increasing productivity. The industry is failing in large part due to the lack of productivity measurements and the courage to change. Many companies are still in the “stone age” and this and the effects of the “cycle” serve to put poor performers in the junk yard.
Productivity and efficiency is the key to surviving the future.
My comments pertain to Wallace’s reflection on technology. To provide context for my comments, I am an insurance IT executive and management consultant (formerly from a “Big 5” consultancy).
(Wallace’s reflection) In your company, simply look at the failure rate of your own initiatives.
(Kevin) I too, am surprised as the number of failed projects. I am often “called in” to assess and rescue projects. The interesting point is that although I’ve consulted for several companies, I often find the same issues. My suggestion is that if companies can first conduct an assessment of their readiness for managing strategic technology initiatives, they can save themselves a lot of time, money, and embarrassment.
(Wallace’s reflection) More recently, we are now seeing systems implemented on the basis of what’s easiest for technology rather than what’s right for the insurance business and customers.
(Kevin) I was recently brought in by an insurance company to conduct an enterprise-wide strategic technology selection process for both insurance administration software and business reporting tools. The project was successful because it was structured so that the business areas (sales and service, underwriting, claims, finance, and reinsurance departments) drove the selection. IT’s responsibility was to vote “yes” or “no” indicating if they could support the technology or if it contained showstoppers. My suggestion is to recognize and structure projects as “company initiatives” rather than “IT initiatives” – after all, the success, staffing, cost, and benefits span multiple departments.
this article may the beginning of the another career, teaching. Currently, I work as a commissioned sales person in the coatings industry. One of the most valuable learning experiences came from an eighty year old chemist three years ago. He worked two days a week as an application specialist at our company. When he saw my desire to learn he counselled me with wisdom and knowledge and entertained me with his insights and wit. The knowledge he imparted was invaluable but more importantly he inspired me to never miss an opportunity to teach my clients and further their understanding.
I would like to make the transition into the insurance industry. I look forward to learning more from you in the next two articles.
An excellent article by Mr. Smith; however, he could obviously never be an executive for one of the Big 3 as he operates his business and treats his people based on disciplined, solid ethics and principles (remember those?) with a long-term “Big-Picture” view rather than the inane, short-term chase-your-own-tail turmoil of the “productivity and efficiency..” disciples/clones, i.e. – “…If we’re not changing and restructuring every few quarters we’re not keeping up…”
When the Big 3 play follow the leader re: banking/financial services, ACE & similar programs, endless in-house “training” from “in-the-pocket” experts/vendors, diversity indoctrinations, reorganizations (layoffs of everyone with seniority/experience and/or hands-on/non-company, real world experience/education… thus able to have their own opinions and speak up [this makes one TOO diverse] when the ivory tower’s “management” is destroying employee morale, alienating policyholders AND agency whilst creating 8-10 figure losses despite increased “productivity and efficiency”…….and don’t forget executive’s multi-100% pay increases!!), so-called “paperless” environments that actually increase paperwork exponentially, dumping 10’s (100’s?) of millions on technology, Xestimating software…(insert $$$$ black hole here) that is built to the VENDOR’s specs, and cannot be changed unless the vendor initiates same and/or without yet another hardware/network/O.S. upgrade……is just plain asinine!
As other articles on this site attest Mr. Smith is spot-on in describing the adverse effects realized when combining a witches brew of: inaccurate premium pricing + “efficient and productive” company-trained bots using one-size-does-NOT-fit-all Xestimating/rebuilding software on the latest & greatest technology + company-trained toe-the-line management zombies –>> led by executives who run the company based on the latest focus group/poll/report/study/whatever everyone else is doing…….What a great business model.
I rarely comment on an article but feel compelled to do so on this one. Wallace your insight into the insurance business is right on the mark. I am looking forward to the other two parts of your commentary. Thank you for sharing your observations and reflections.
I could not express your observations and insight any better..For years I have been lobbying for the value of “good” people & that you cannot acquire experience and business savvy thru programed learning texts and seminars..They need to be developed on going with daily interaction of customers both external & internal and an attitude of pride and personal ownership must be promoted & practiced daily and talented people treated as “assets” rather than “expenses”..Good experienced and self motivated people need minimal supervision and are the true producers of profit/growth revenues…Our industry is saturated with high cost management that tends to inhibit independent thought and quality work & people development …Right On !!!! You will be missed by some…
I too started in the early 60’s and am retiring at the end of this year. It’s kinda scarey to think about nothing but sitting on the porch drinking brown stuff all day long and possibly going fishing occassionally. Guess that’s why somebody invented the occupation of consultant!
Great reflections and am looking forward to the next two installments.
Wallace, I have only been in this business for 30 years and know less about it now than I did when I started. Regardless, it has always amazed me that as an industry we have never been able to “fix” our fundamental problem of shortsightedness.
Most company personnel are trained to look at a calendar year as some sort of race to be won. Branch managers are more income statement than balance sheet oriented, but the balance sheet is where the carrier’s viability lies. We are an industry of sprinters trying to run a marathon.
We disagree perhaps on the use of technology as I am a staunch supporter of automating routine functions, not to mention that I can’t find anyone with dictation skills, much less manual experience rating abilities! However we agree completely that qualified, loyal personnel, both young and less young, are the glue that keeps a company together.
In most societies the elderly are revered for their wisdom and mentor the younger people. In most trades there is an apprentice system. While it is true that younger people learn quicker and adapt to change faster than older people, they lack the wisdom that comes with experience. Your idea of a transitional period between employment and retirement is an excellent one all businesses would do well to embrace.
If there is a drawback to technology it is that it has only been in the last 20 years or so that we have abandoned the technically proficient in favor of the technologically savvy. When the PC becomes as reliable as an IBM Selectric and network administrators share the same status as the office supply clerk, which will probably happen, we will have to re-evaluate the relative importance of every employee and arrive at a better balance between traditional and emerging skills.
Good luck with your personal transition and thanks for your years of service to this great industry. I look forward to your next installment.
I’ve known Wally Smith for eighteen years and I consider him a good friend, an honorable man and a silent leader. So I know he won’t mind me sharing a disagreement I just now discussed with him.
You can’t stop the inertia of technologically. Yes, it has not always lived up to many of its promises, but it has revolutionized the way we do business for the better. Pad and pen became manual typewriter, which became electric, which became word processor. The Internet has opened avenues of process improvement that are too tempting NOT to spend time and money on. E-mail is excessive, but is invaluable if wisely used. I know, we should step carefully, but we should always go forward.
Regarding Wally’s comments about people, nobody knows how to treat people better than he does, or how to get the most out of them. Mr. Smith is that rare breed of executive people respect for what he believes in. He will be missed.
Very thoughtful commentary. For those of us who deal with his company, National Grange Mutual, we can more fully appreciate his comments. NGM seems to value its people, know what is does and does it well. It leads with technology in a very proficient manner. I have always felt it was a shame that most of the other carriers didn’t follow NGM’s model.
Overall, this was a great article. However, Mr. Smith did not focus enough on actual business processes, reengineering and increasing productivity. The industry is failing in large part due to the lack of productivity measurements and the courage to change. Many companies are still in the “stone age” and this and the effects of the “cycle” serve to put poor performers in the junk yard.
Productivity and efficiency is the key to surviving the future.
Greg Crawford
My comments pertain to Wallace’s reflection on technology. To provide context for my comments, I am an insurance IT executive and management consultant (formerly from a “Big 5” consultancy).
(Wallace’s reflection) In your company, simply look at the failure rate of your own initiatives.
(Kevin) I too, am surprised as the number of failed projects. I am often “called in” to assess and rescue projects. The interesting point is that although I’ve consulted for several companies, I often find the same issues. My suggestion is that if companies can first conduct an assessment of their readiness for managing strategic technology initiatives, they can save themselves a lot of time, money, and embarrassment.
(Wallace’s reflection) More recently, we are now seeing systems implemented on the basis of what’s easiest for technology rather than what’s right for the insurance business and customers.
(Kevin) I was recently brought in by an insurance company to conduct an enterprise-wide strategic technology selection process for both insurance administration software and business reporting tools. The project was successful because it was structured so that the business areas (sales and service, underwriting, claims, finance, and reinsurance departments) drove the selection. IT’s responsibility was to vote “yes” or “no” indicating if they could support the technology or if it contained showstoppers. My suggestion is to recognize and structure projects as “company initiatives” rather than “IT initiatives” – after all, the success, staffing, cost, and benefits span multiple departments.
Kevin
Mr. Smith,
this article may the beginning of the another career, teaching. Currently, I work as a commissioned sales person in the coatings industry. One of the most valuable learning experiences came from an eighty year old chemist three years ago. He worked two days a week as an application specialist at our company. When he saw my desire to learn he counselled me with wisdom and knowledge and entertained me with his insights and wit. The knowledge he imparted was invaluable but more importantly he inspired me to never miss an opportunity to teach my clients and further their understanding.
I would like to make the transition into the insurance industry. I look forward to learning more from you in the next two articles.
Thank you.
An excellent article by Mr. Smith; however, he could obviously never be an executive for one of the Big 3 as he operates his business and treats his people based on disciplined, solid ethics and principles (remember those?) with a long-term “Big-Picture” view rather than the inane, short-term chase-your-own-tail turmoil of the “productivity and efficiency..” disciples/clones, i.e. – “…If we’re not changing and restructuring every few quarters we’re not keeping up…”
When the Big 3 play follow the leader re: banking/financial services, ACE & similar programs, endless in-house “training” from “in-the-pocket” experts/vendors, diversity indoctrinations, reorganizations (layoffs of everyone with seniority/experience and/or hands-on/non-company, real world experience/education… thus able to have their own opinions and speak up [this makes one TOO diverse] when the ivory tower’s “management” is destroying employee morale, alienating policyholders AND agency whilst creating 8-10 figure losses despite increased “productivity and efficiency”…….and don’t forget executive’s multi-100% pay increases!!), so-called “paperless” environments that actually increase paperwork exponentially, dumping 10’s (100’s?) of millions on technology, Xestimating software…(insert $$$$ black hole here) that is built to the VENDOR’s specs, and cannot be changed unless the vendor initiates same and/or without yet another hardware/network/O.S. upgrade……is just plain asinine!
As other articles on this site attest Mr. Smith is spot-on in describing the adverse effects realized when combining a witches brew of: inaccurate premium pricing + “efficient and productive” company-trained bots using one-size-does-NOT-fit-all Xestimating/rebuilding software on the latest & greatest technology + company-trained toe-the-line management zombies –>> led by executives who run the company based on the latest focus group/poll/report/study/whatever everyone else is doing…….What a great business model.